This would have been much better if also compared with cultural background. I'm from Spain and it's common here to live with the family after graduating. It's not even a bad thing and many times it's not even due to economic reasons; we just love our families and spending time with them. I'm sure that family ties (culturally dependent) also make an influence on who lives with their family, so I'd love to see this in the report.
> we just love our families and spending time with them.
I doubt love is a large factor here, it is definitely a cultural thing.
Many of my friends still live near their families and love spending time with them, but you are viewed as a failure in society if you cannot survive on your own. If living at home with your parents wasnt such a bad stigma in cultures I'm sure more people would do it as they also love their families and it makes economic sense.
Also most people leave their families when they go to college, often not in the same town the grew up in, then take a job likely not in either town they grew up or studied in making it very difficult to live with your parents even if you wanted to ignore the stigma of it
When I was a kid, we lived in SE Asia, and multi-generational homes were the norm. Usually more of a shared farm/compound with a bunch of satellite homes clustered next to each other.
Honestly, even as an introverted kid, I liked visiting my friends in their stilt homes and hanging out with the various families. Having everyone together and able to support each other was nice.
Religious background, martial status and future housing aspirations might have also been useful. I live at home. The main reasons in my case are that I am not married and while apartments are affordable, saving money for a really nice house is harder to do if I have one.
Agreed. Even in Switzerland it is not to unusual to stay _at home_ for a while. More because economic reasons, but its reasonable. Many will, when they move out, look for something nice and not start with shitty small apartments or crowded WGs just to get away from their parents.
The 'report' is drawn from Earnests clients. Earnest bills itself as the bank of tomorrow, but seems to profit mainly by student and personal loans. As such, one of the requirements to get a loan/be used in this totally scientific advertisement is to be in the US...although they appear to only operate in 41 states, so perhaps there's a statistically significant exception.
Interesting to me is that in the US most parents want to give their kids the boot at 18.
In India, where my wife is from, family lives together. Family is a big thing there. It is not uncommon to see mom and dad, daughter and son, grandmas and grandpas, or even aunts and uncles all living in the same home.
This is purely a product of the post-war boom era. Before the 50s, Americans behaved predominantly the same way - children would even be married while living under the parents roof up into their 30s.
But once it was financially tenable in the unique financial circumstances of post-WW2 America for pretty much any man that wanted to could get a job with no education that gave him the financial means to "have it all".
Gradually the economy corrected itself, but there is a lot of cultural weight on the idea of success associated with living in your own home, regardless of the feasibility financially.
You might want to rethink that. That cultural value makes sense when there is broadly rising economic activity.
In my experience parents and their children are operating in two completely different economies.
To be blunt in case I risk being overly oblique: 1/3 of the female students at my university did sex work to pay the rent. That's in a place where they worked hard to get into an elite university and didn't have to pay extraordinary tuition fees.
Further down the socioeconomic ladder it gets worse. Merely surviving without debt is a success story for a millennial.
I have to say: almost everything on this subject I read from the media is a fiction. I'm not saying the stats are made up, but the overwhelming impression you get from the box on the wall is powerfully wrong.
> 1/3 of the female students at my university did sex work to pay the rent
I find it hard to believe there's enough customers to make this viable, let alone that it actually happens. Do you have some source to back this claim up?
> 1/3 of the female students at my university did sex work to pay the rent.
What did all the male students do to solve the same problem? Just regular jobs?
If the girls were doing sex work just because it's easier/more-pleasant than spending 25hours per week waiting tables or stocking shelves then this doesn't seem to make much of a point.
On the other hand, if sex work is generally an act of desperation then I'm genuinely curious about what an equally desperate boy in similar circumstances tends to do.
The UK, at a red brick (that's the British Ivy League).
The basic cost of living (rent/council tax/water bills/food prices) has been gradually inflating while the cost of labour increased at a far more modest rate. This has been true for a long time. I think because it is a creeping thing it is harder to spot when the new normal began.
Anecdotal but several degree holders I knew in college (mostly accountants!) continue with prostitution afterwards as well because it is otherwise difficult to make ends meet.
The explanation I'm partial to is that the price of energy has stalled progress for most people in western society. When you look back to 1973 it is really quite dramatic but we are now used to high prices and the various accommodations made as side affects.
I know most people my age see 2008 as a break point, but the rot has been going on for much longer than that.
Yes, it is very common to live as a big family together in the same house. Infact it might be considered rare where children do not live with their parents and siblings.
It is a part of a culture than anything else. I think many Asian countries have similar culture. I am from India but live in Dubai and even in middle eastern cultures it is not uncommon to live with parents and other relatives in the same house as a big family.
This is interesting considering all the empty space available in the US compared with countries like Japan where it is more common to find people in their 30s still living with their parents even if they are married, and it is not weird at all, it is as normal as you can get considering the space available for housing.
This is without even discussing the macroeconomic effects of central banks attempting stimulus by printing money, driving up asset values artificially.
"WHAT a difference a decade makes. In 2006 house prices in America hit an all-time high, after rising unabated for the previous ten years. The crash that followed brought the entire global financial system to its knees. As our cover leader this week explains, despite efforts to fix the plumbing of the American mortgage market, housing in the United States remains a dangerous menace to the world economy. In the meantime property prices in the country, underpinned by low interest rates, forge ahead. On average, American home prices have recovered nearly all their losses from the 2006 crash, but when adjusted for inflation they are still 20% below the 2006 peak."
Depends on your perspective, and what you consider problems.
If it's about not housing enough people in the major cities, then yes, it can probably solve that. Providing some quality level of housing for every pricing point ... well sure. That can be done by deregulating. We all know we will NOT like quite a few of those quality levels though, and some will be bad enough to make actual victims. For health reasons, for preventable accidents reasons, for crime safety reasons ...
If you're talking about doing that while maintaining current standards of housing and standards of traffic, crowdedness of the streets, etc - of course not. Can't be done, of course.
Housing everyone at a decent standard, lower than now, but decent ... well regulation (ie. shifting regulation from local to federal) can do that.
I think that that is by far the best option. Shifting permitting from local level to at least state, better yet, federal level.
The best option would be to provide distributed jobs again, of course. But that can't happen because, well it's complicated [1].
Hyper-local regulation has proven to be a disaster.[0] It’s not just about providing housing, but about having houses near jobs and having diverse communities.
State-wide is a bit problematic for a state as large as California.[1] The problem is there is no intermediate level of regulation between the county and the state.
Federal regulation of housing has been terrible.[2] Even before you consider Ben Carson as Secretary of HUD. It’s impossible for a small group of people working in a swamp to create all the necessary regulations ranging from Appalachian cabins to high rises on landfill in an earthquake zone.[3]
There is an ideal size for each form of government and regulation. I think for housing, the ideal size is probably slightly bigger than the well-connected metro area. So, the entire San Francisco Bay Area should be one unit, but not all of California; and the Northeast Megalopolis from Virginia to Massachusetts, but not the entirety of those states, should be one unit.[4]
I quite enjoy tiny houses, but they're a small luxury. In terms of efficiency, they don't hold a candle to even a small multistorey building. The reason they're cheap(ish) is because they don't include land prices.
I'm curious where the profits accrue in the real-estate industry. It's a manufacturing industry where we have relatively advanced machinery to build the houses themselves; you'd think that the cost of housing would have dropped the way, say, cars or silicon has. But it hasn't: the price of housing has largely been flat or increased. Usually when this happens, it's because there is some monopoly scarcity in the value-chain that allows the producer at that level to reap large profits, eg. Microsoft and Intel in the desktop software value chain, or Apple in the mobile ecosystem.
I'd thought that real-estate developers were that scarcity in the housing value chain, but this article suggests that they struggle to break even. Who is it? Construction and real-estate brokers can make a lot in boom times, but they tend to lose it to the cyclical nature of the real-estate industry, so I don't normally think of them as the ones getting rich. Is it Caterpillar, making the heavy equipment used by construction? Land owners, who can keep land supply off the market? (But then, the price of raw unimproved land basically tracks inflation, indicating a competitive market.) Property managers? Is there artificial scarcity enforced by transportation infrastructure - the article indicated that one of the developer's primary constraints was the need to build near light rail?
> It's a manufacturing industry where we have relatively advanced machinery to build the houses themselves; you'd think that the cost of housing would have dropped the way, say, cars or silicon has.
I'm not sure why you think that.
Unlike manufacturing cars or silicon, housing has very poor economies of scale. Building 10 houses isn't a whole lot cheaper than building 5.
It's also a lot harder to make more efficient. Housing isn't manufactured in large factories where you can optimize every step of the process—instead, it's done by lots and lots of local firms. This leads to vast differences in the level of efficiency.
There's also the problem that there is still a social stigma against "generic" housing. Having the same phone as everyone else isn't looked down upon, but mass-produced homes carry a definite negative connotation. People look down on cookie-cutter condos or manufactured homes.
> But then, the price of raw unimproved land basically tracks inflation, indicating a competitive market.
Where on earth are you getting that from? Raw land in the middle of nowhere might track inflation, but land near any jobs center certainly doesn't. That's also the explanation of where most of the profits go: to owners of appreciating land in desirable areas, which is a mix of professional speculators/investors and existing homeowners.
Source: Spent Thanksgiving hearing about the frustrations my architect relatives have dealing with different contractors around the country.
Prefabricated housing [1] was also employed in Europe after WWII to accommodate the demand for housing in and around cities as many headed from rural areas to cities for work [2]. The social connotation usually varies by neighborhood, as with other types of housing, and merely living in a prefab flat is not commonly considered undesirable. Although most often found in the former Warsaw Pact countries, they are also fairly common in Sweden [2] and France [3].
The same can be said about Hong Kong [4] and Singapore [5].
> and merely living in a prefab flat is not commonly considered undesirable
Ehm, no.
Those prefab buildings are the immediate definition of "housing for unemployed immigrants". The social stigma is so bad, when I was in elementary school, I lived right next to one – and my grades were horrible. Some day, my parents told the teacher we actually owned a house right next to the bloc (the teacher had thought we lived in the bloc), and suddenly my grades jumped from D to A. All of them.
The stigma is massive, and it will affect your life massively.
I think you're both right. In the eastern bloc I think the stigma was less and in Singapore there was no stigma that I could tell --maybe some super rich people might have looked down at people in the estates, but I didn't come across them. However, in France for sure there is stigma.
Really depends on where you live. I'm writing this from a 2-room apartment in a modernized WBS 70/5 [1] in East Germany, and I have not noticed any social stigma until now. Instead, I get to enjoy the good prices (under 400 euros incl. utilities for 48 m² = 523 sq ft) and public transport connections.
Well, I don't really know what to say. It's just a regular apartment, by German standards. :)
When I moved in, the owner had just refurbished everything a bit (as they always do when a new tenant moves in). The ingrain wallpaper [1] on the walls and ceiling painted plain white, the linoleum [2] floors freshly cleaned, and the jambs of the interior doors had been replaced by new ones. If you don't know what linoleum looks and feels like, imagine a typical office floor, but with a faux parquet pattern instead of these generic blue-green-grayish dot patterns. The linoleum shows a bit of wear (you can see where the previous tenant had put their furniture), but I don't mind.
Apart from that, I've got radiators (connected to district heating) in both rooms, water and sewer pipes leading into the kitchen (but the kitchen furniture and plumbing needs to be supplied by the tenant), and a fully-furnitured bathroom with tiling all around, toilet, sink and bathtub. If anything from that list should ever break, I call the landlord and a craftsman will be on site to fix it the next day or so, at their cost.
That's the state if the building is well-maintained. Some of these "Plattenbauten" (German for large-panel system buildings) have been privatized and sold to investors. These are usually the only ones which haven't gotten a makeover since the iron curtain came down. Rent is about the same, though. The situation is better for me since my apartment is owned by a housing cooperative which dates back to GDR times. They don't have to pay any interest or dividend, so all the money can go into maintenance, modernization, and sometimes new construction when they can get their hands on a nice plot of land.
> It's also a lot harder to make more efficient. Housing isn't manufactured in large factories where you can optimize every step of the process—instead, it's done by lots and lots of local firms. This leads to vast differences in the level of efficiency.
> There's also the problem that there is still a social stigma against "generic" housing. Having the same phone as everyone else isn't looked down upon, but mass-produced homes carry a definite negative connotation. People look down on cookie-cutter condos or manufactured homes.
Agreed on both points.
The firm Elemental Architecture utilizes 'incremental building' to help improve the efficiency of housing construction while simultaneously attempting to address the homogeneity of low cost housing projects. The idea is certainly in its nascency, but it seems like a novel approach. In short, low cost housing is constructed such that occupants are able to expand and adapt the lodging to their needs later on (paying for the materials and labor themselves).
This approach was featured in Urbanized [0] (a documentary on urban design) and later in an episode of 99% Invisible [1], among other places, I assume.
If you want to mass-produce housing, you have to get around two very big barriers:
1. Most of the market looks down on mass-produced housing thanks to its association with trailer parks and/or identical condos.
2. Housing is mostly produced locally. Shipping large homes would be extremely difficult and expensive.
> Also, cars have customers which will pay many multiples the normal price for new technology, and that market that lasted for a century.
Sure, but that's equally true for housing. There are plenty of people who will pay a significant premium for a "smart home" or houses with energy efficient built in. This doesn't make mass-manufacturing easier.
> Housing is mostly produced locally. Shipping large homes would be extremely difficult and expensive.
You don't need to ship the whole house in one piece. If you ship premanufactured panels (which is the common method), the price of shipping should be comparable to shipping the "ingredients" to the construction site.
The economies of scale that a manufacturer would get from cranking out hundreds of thousands of the same home a year are "real". There are a lot of reasons the market doesn't support such a business though.
The smarthome market is just not in the same league as cars when it comes to an subsidizing technological development. There is no Formula 1 for housing.
I used to work in the real estate development industry. The best returns are almost always made on increases in land value. Who exactly captures that profit can vary a lot. Sometimes it's land speculators who buy land cheaply on the outskirts of growing cities. Other times it's developers who buy a large parcel cheaply and then develop it slowly until by the end it's a much more desirable place for a lot of people and they can sell sell product at premium prices but with a very low land basis cost. More often than not it's property owners - typically REITs for multifamily and office buildings - who benefit from price increases. And they can profit enormously from speculating and trading properties.
In a lot of ways the US real estate market is similar to luxury consumer goods markets. People are willing to pay a big percent of their income to live in SF or NYC because those cities have a strong brand. There's a perception of value that goes above and beyond quantifiable quality of life measures. It's not radically different from how people will pay a premium for an iPhone over an arguably equal or better Android phone. Landowners and homeowners can benefit from owning property in a location that commands a brand premium not unlike shareholders in a company.
The asset inflation that a good chunk of that profit derives from (because so much of real estate vitally depends upon transaction churn) is in the dirt, not the structures on top. Verify this for yourself by looking at fire insurance: it hasn't nearly increased coverage amounts by the same growth as real estate in general.
Any taxpayer-based bond issuance for infrastructure of water, wastewater, roads, electrical, data, and emergency services is a giant externality that developers pay only a tiny fraction of by comparison, and the developers capture a big bite of the profit up-front on the initial sale. Taxpayers end up footing the risk cost of anticipating the network effects of the build out will pay off the projects. This is compounded by the car-centric American culture imposing infrastructure costs that go up as the square of the expansion, but by and large cost recovery and operational costs are comparatively linearly composed because American suburban and exurban developers tend to sell low-density in the first pass greenfield development (large lots, fewer people per acre) to sell their book and cash out fast. NIMBY politics then gridlock densification later, so you get all this infrastructure that is now spread among fewer taxpayers than you need to effectively not only pay it back, but properly maintain it as well.
The real estate industry enjoys enormous subsidies that really distort the market, and if you aren't in the industry this basically translates as monotonically increasing land prices (which most people interpret as constantly-increasing housing prices). Much of the dysfunction is likely to entrench and get much worse in the future, and won't stop until a really ugly, sharp dislocation happens.
Some of the better returns, in my limited experience, are reaped by land and under-improved property speculators/developers (development, I this case, referring to lot subdivision or other methods of locking in construction approvals above and beyond existing by-right approvals).
Another large proportion of potential profits are destroyed by the regulatory process because by-right approvals are often extremely limited and easily challenged by third parties. I'm a huge fan of communities being able to shape their built environment, but making most development approvals into a lengthy, expensive series of challenge/response hurdles rarely leads to progressive outcomes.
Lastly, project delivery timelines can de-sync with economic cycles due to long developent periods and the timeline of construction itself. Since construction starts typically lag economic booms, people take losses due to this off-cycle behavior more often than they realize unusual gains.
I work in a small construction market though, so my experiences may not carry well to the more populous parts of the USA.
> But then, the price of raw unimproved land basically tracks inflation, indicating a competitive market.
This is true looking at all land, as recent articles by Robert Shiller indicate[0], but especially valuable land has outstripped inflation by many, many times-- in the Bay Area, for instance, land value has increased by a factor of 10X in recent decades (or significantly more, depending upon neighborhood). The only thing that keeps land in check is the ability for land to sprawl out into previously marginal land, and our ability to commute from where we are sprawling to is reaching a breaking point. (I know people commuting from Tracy to SF, which is hell.)
Houses get bigger and use more expensive materials and fitout that increase the comfort of the inhabitants. Building a house now to the standard of say 50 years ago is either impossible because of building code, or doesn't pose a sufficiently attractive value proposition to convince buyers.
In other words, a house and a house are two different things.
Builders also cut corners. Example, my 1974 home has the AC condenser on a concrete slab. My new 2015 home it's on a piece of plastic supported by dirt. Guess which one is noisier.
Garage doors are now styrofoam, unlike solid wood in the doors of the past. Hence its cheaper, and your garage opener doesn't need to be as strong so that is cheaper too.
Hardwood floors can be engineered hardwood, while the past was only solid wood. Significant savings in material and installation.
Land lots are getting smaller too...here in Atlants, developers are buying up older homes and putting up several home, dividing the lot up.
1) This study was proven flawed, because of definition 'home'. It does not include condos, and nowadays that's significant. I remember long threads about it on other 'forums'
2) More correct metric would be m^2/person and m^2/adult and that metric is in constant fall. Can't recall exact numbers, it is now somewhat 25-30% less m^2/person than it was in 70-s.
Every once and a while I run across a home from the 1800s that probably shouldn't have survived, and the shortcuts the builders took are similar to today's shortcuts. Improperly sized beams, improperly spaced rafters, etc. In some ways, you could consider an 1800s rubble foundation and irregular framing spacing worse than today's shortcuts.
> I'd thought that real-estate developers were that scarcity in the housing value chain, but this article suggests that they struggle to break even. Who is it?
The real-estate developers are still the scarcity in the chain. They make the money -- and lots of it.
They just don't make that money on affordable housing for the poorest of people without government subsidy. Which is why that stuff almost never gets built.
But they make a good chunk of cash on government subsidized housing (anything with Brownfield credits, for instance) and they make a lot of cash on luxury units. I'm in a small city in the Midwest, and condos here are selling for $300k - $600k despite way-below-average land and labor costs. There's 20-40% profit margins in those units, no one is loosing any money there.
People don't expect to get a return on investment with cars and silicon. Really if you think of it, there's wide spread market manipulation being performed by the public, local, and federal government.
I think the light rail thing is so that they get a higher development cost.
The simulator mentioned in the article says it costs $9 million to construct 50 units. That's $180,000 per unit, which seems like it must have some regional peculiarity to it (you can buy a new 3 bedroom house for less than that in many areas). Hopefully they are at least pretty nice apartments.
Housing is especially expensive in Denver, and likely even more so near public transport. I'm sure the building boom going on there has some impact on all construction costs.
Before I posted I did a sanity check. You can buy a decent new house in the Orlando area for $120,000. That's with a lot and so on.
A better study would examine the cost of housing across a variety of job markets, not pick 1 and make units with high proximity to mass transit the only units they talk about.
Wow, I had no idea Orlando was that cheap (I'm not American and most of my American friends/colleagues are from much more expensive cities).
In Berlin you generally can't buy a 3BR anything (house, condo, whatever) for less than $400k (aside from terrible/out-of-reach neighborhoods), and even that would be on the cheap-side.
$120,000 might be too low a number. $150,000 is certainly defensible.
(You can jump the reply restriction by clicking on the comment timestamp; The delay in showing the reply link is there to provide some friction when threads are going too fast.)
> That meant choosing a small site and limiting the number of units to 50, making it hard to count on winning federal tax credits to help fund the deal.
Typically developers reap management fees in the low income house arrangements and sign away LIHTC (the tax credits) to their partners. LIHTC are a pretty complex topic and there are a lot of operators in this space making a lot of money. I might be paranoid, but something feels fishy about this.
> Developers struggle to break even on rental projects for the poorest Americans.
This might be a stupid question; is it not possible to min-max apartments for overall cost of maintenance or cost/person so it's easier to break even despite a possible higher initial cost?
Are we designing low income housing wrong? Is anything getting in the way?
I'd argue yes. We should be building housing for working class / middle-class residents (sometimes called "missing-middle" housing, although developers often abuse that term to include luxury units) That's where demand is greatest while still having reasonable budgets and modest-but-workable profit margins for developers involved.
> Is anything getting in the way?
Yes, developers. (Occasionally zoning/historical associations/local laws in places like San Francisco or NYC. But primarily, it's developers)
Instead of building where demand is greatest, developers build only where profit is greatest -- almost every developer focuses solely on ultra-luxury housing (with ultra high profit margins) or low-income housing (where margins are reasonably good due to government subsidy).
If there was new working-class housing construction, their old units would filter down to low income households, because there's enough middle-class people for that impact to be felt in a market. But the margins there are lowest, so no company chooses to do that.
Instead, property developers focus soly on high end. Technically, those filter down eventually too, but by definition, there will never be enough high-income people for those properties to filter down to middle class folks in amount meaningful enough to help the market (so in turn, their properties can't filter down to low income households)
This breaks the entire market. High-end construction costs soars (because they want it and can afford anything). Middle-class properties become psuedo-high-end (for no other reason than lack of middle-class product) which creates this weird distinction between rich middle-class people who bought before the bubble, and poor middle-class people who have healthy wages, but burn 50+% of their income on rents (and so are effectively poor, even though they are on-paper upper-middle-class), and now you have an ever-growing group of "low-income" people who can't afford anything.
If we prioritized middle-class working-class housing, we could get units going without major government subsidy, and the old housing could become affordable to low-income folks (also without subsidy). But that would require companies to not prioritize profit over everything else, so it won't happen.
I think the problem is you are giving a money on the table explanation for the missing lower-income housing. If developers could make more profitable lower-income housing (and by lower I mean anything other than high-end) they would and a lack of such housing is probably caused by a lack of demand(not in the sense that poor people don't want housing but rather they can't raise the price sufficiently to make it profitable for a developer).
I would rather argue that government regulation is definitely the problem on multiple levels. For one you probably have to deal with state and federal regulations making it very difficult to get economies of scale. Does every state/city really need to define the bare-minimum requirements for a house differently? Is there really nothing they can agree on so we can have standardized housing rules? That alone should limit housing costs significantly but if you also limit the power of local government to restrict growth and force it to accommodate new citizens rather than try to block them would also be a very good way to reduce a lot of the costs of new housing. I wonder how much developer money is spent litigating in places like New York and San Francisco that should be seeing most of the growth in housing.
Notice that this is not a problem
In most of the US. Most housing in the US is still probably cheap it's just nobody wants to live in the middle of nowhere. Housing is very expensive in a few critically important areas that have largely failed to accommodate the influx of immigrants.
There are some developers that do. They're mainly outside cities, building out townhouse style multi home communities. From what I've seen the build quality for all of them is universally terrible. They can't splurge like a high end condo but they have to make it look "not poor", so they end up with the worst combo. Cheap and low quality.
> Yes, developers. (Occasionally zoning/historical associations/local laws in places like San Francisco or NYC. But primarily, it's developers)
No, it’s primarily zoning.[0][1] To neglect the vast middle of the market is economic insanity. If some developers build only luxury housing, then they’re leaving money on the table; some other developer will build and sell. When Domenico Crolla can sell a pizza for $4,000, that doesn’t mean Pizza Hut stops selling $15 pizzas. In a well-regulated market, somebody will fund and build middle-class housing.
The problem is that luxury car-oriented regulation has made practical housing near jobs impossible to build.[2][3][4] Occasionally, hyper-local objections to affordable housing.[5] But primarily, it is misguided regulation.
There is some good work on this subject being done by good (not all) Low Income Housing Credit developers, but it is difficult. Like many tax credit programs, application, syndication, and compliance is a real expense both in time and focus.
Also, many communities have zoning codes, many fifty years old, that make it difficult to build low-income projects by restricting unit sizes, mandating minimum lot sizes, etc.
There are cases of communities being sued over discriminatory zoning, but the typical impact is that the communities add flexibility for less expensive single family homes, but the dense housing and multi-use neighborhoods that work well for low-income communities are not incentivized. I know Massachusetts allows zoning to be overruled if a community lacks affordable housing (40B?), but it is still a fight.
Lastly, between two developers, one building high end and the other building low-end, who is going to pay the land owner the most money if there is the same amount of units allowed by-right? If the low-end developer pays high-end land prices, where does the extra money come from?
I suspect Japan's capsule hotels could solve that problem in the US, but no one wants to build those. People working at startups would probably love them though.
There's lots of empty space in Japan, too. Whole villages are being abandoned to the point where they're taking stops off the train lines. The problem is that only retired people want to live in rural Japan, everybody else goes to the big city to work.
>Japan where it is more common to find people in their 30s still living with their parents even if they are married
This is driven chiefly by their confucian societal value system rather than economics though. The wives (who are almost always the ones who have to "move in" to the family) mostly hate the experience.
Living with family while single (regardless of age or gender, but especially if you are female, since gender equality in the workplace still has a long way to go) on the other hand is primarily economically driven.
I think your are mistaken. Living with one's parents in most parts of the world is just the default thing to do.
The whole concept of moving out for no reason at all is super weird and confusing for most cultures, and borders on a sense of abandoning one's parents.
Not necessarily. At least in Arab countries people used to get married in their parents' home. The wife would move in to the house of the husband's parents.
You also have the "lost generation" of herbivore men, "parasite-singles" and housebound otakus who contribute to lots of stay-at-home-beyond-the-expiry-(grown)children precipitated by a tepid economy.
It's normal to live with your parents into your 30s in many countries. Italy, for example. People often wait until they can buy their own house to move out.
Exactly. No point in trying to find a cheap place just because when you can actually save the money and move to a great place as soon as it makes sense for you.
I dont get the mindset at all. I dont want to live in a shitty small apartment or something shared with strangers just _because_.
i dont see how this is in conflict with living with my parents.
> Living with other people your own age?
Nope. Done that, wont do again.
Disclaimer: I dont live with my parents anymore but wouldnt mind going back. My parents are also cool, its respectfully living together, more than i ever had when living with people my age.
I don't particularly want to live in the middle of a corn-field though, I want to live near my friends, and live near other stuff that we're all into, which means cities, which means smaller areas.
You can blame property tax funded roads and state sales tax funded electrical.
In absolute dollars, especially on the order of decades, medium density (3-5 stories, depending on foundation needs up to 10) is the "maximally" efficient housing right now. As building materials and efficiency improve, denser structures become more economical, but the fundamental reality is that the cost of the infrastructure to support rural or suburban areas are gigantic, on such an order that while building wood houses in the forest is cheaper in the immediate term than concrete, supplying it with infrastructure access is dramatically more costly.
But we subsidize private real estate with public infrastructure paid for by not-the-developer. It biases the market towards less dense housing because the costs are absorbed by either an entire township, the entire state, or the entire country.
But people don't have to clump only in megacities. They can clump in midsized cities throughout the Midwest and elsewhere.
There is no reason there can't be more Portlands or Minneapolises in the Midwest, for example. You take all those 2,500 to 40,000 communities and build around one or the other and soak up the surrounding communities to make bigger and richer communities.
The same reasons that make a midsize city more attractive than a cornfield also make a large city more attractive than a midsize city.
As a rule, larger population center enables more and better cultural options, more and better education options, more and better industries and choice of jobs - There's a zillion of things that aren't feasible in a 100k city simply due to lack of scale.
> There is no reason there can't be more Portlands or Minneapolises in the Midwest, for example.
In theory, sure. But in practice, there are a lot of reasons why there aren't (or won't) be more of those types of places.
The Midwest is strongly anti-city. In terms of culture, lifestyle, economics, politics, etc. Even self-described "urbanists" in the midwest are typically strongly anti-city (their goal is usually to reproduce the problems of existing cities, not to attempt any solutions).
It's not like there is a shortage of small cities in the Midwest. There's a reason no one is excited to move to Toledo, or Lansing, or South Bend.
>There's a reason no one is excited to move to Toledo, or Lansing, or South Bend
I think if we look at what made these cities we can understand their current standing --but with effort they can change. Portland was not always Portland; Austin wasn't always Austin. People need to invest and put in effort to drive these places to where they want them. They sure don't have to be replicas of NYC or LA, or SF. They can bring to them what they find valuable while at the same time changing with the times to accommodate and attract or keep their youth as they move into the workforce from Uni.
They can transform these small-to-mid-sized cities into attractive cities with (youthful) Midwestern values.
That sounds wonderful. Just as soon as you pry the car culture and suburbs from the hands of the folks who live in say Kansas and enjoy the status quo...
I think you can but you have to have something to divert the kids who graduate away from going to the big cities and have them build local cities [with local attractions such as jobs, education, cultural things, entertainment options]. Sure it will evacuate some of the rural areas some, but it should build nicer --perhaps even semi-planned areas, close by. It would require some central planning, which is a bit antithetical to us Americans but some people from other places might relate.
And sure, some people do like living closer to nature. I acknowledge we have a nice core of people who love nature and land and cultivating the earth, what have you --they can still have their smaller ag-centered communities.
Pittsburg seems nice enough but seems to be pretty reasonable. Dallas? I'd say very nice, with a mix of suburbs and city spaces and a much nicer set of roads and light rail than was there in the 1980s.
Perhaps there is compromise? Perhaps this is really only a real problem in SanFran and NYC. Even NYC has The Bronx and good rail service.
I find Dallas horrifically laid out. Too many suburbs, too many big roads, waste of space. Pittsburgh and all the other cities that boomed during the 'great' periods of America have the same problem, which, notably, San Francisco and NYC have somewhat less of -- big roads for big cars, and big garages to take those cars home to.
The problem isn't sparseness or density, it's a combination of readily available fossil fuels and mindset, I believe.
Dallas proper has pretty good light rail which extends all the way to some of what used to be considered exurbs ( like McKinney ). There's the usual clusters of 3-7ish story condo blocks in spots, towards University, around Deep Ellum. Even in Plano, close to the tracks.
If the position is simply to oppose cars altogether, then I don't know where you can go. But I suppose you can find a bus to take you there...
I'd never suggest giving up the right to live where you want while you have the means. We can have both mice smallish but well-cultured cities that respect their surroundings as well as have vibrant rural communities. Think Heidelberg and its surrounds, maybe Ithaca in NY.
> more common to find people in their 30s still living with their parents
India also. I visited a few years ago and was totally "wierded out". They call it "Joint family" there. Several cousins and uncles living under the same roof. Lots of drama in the kitchen :)
The first thing to solve ANY problem is to recognize there is a problem.
So the biggest problem is the government does NOT think there is a problem. And those people should try and work EVEN harder to afford a basic housing or mortgage.
well the Federal government allow owns nearly thirty percent of the land area of the United States, it is particularly high in many Western States which adversely affects availability on the West Coast versus the East.
I find the living with parents issue to be an odd one because the period where that wasn't the case doesn't seem to be so long ago. There is a strong push toward independence of self in the US and that may have pushed people to seek their own homes a lot earlier than elsewhere but to sustain that needs a vibrant economy up and down the economic scale. To get back to that would require lessening the burden of regulation and taxation, something never happening in Japan and resulting in their stagnation for decades. You cannot spend borrowed money for so long to get out of the rut
I left home (in a medium-sized town) many years ago when I was 18 to go to uni and then later to find work in a big city.
If only my parents had lived in a big city, I would have stayed at home and saved so much money. Instead I have saved practically nothing. It's just impossible to save when the rent for your 'shoe box' in the city eats up half of your after-tax salary.
I'm somewhat older, so I see it from the other side. Many of my friends and relatives have adult children.
In my observation, it's no longer seen as strange for kids to bounce in and out of the parental homestead, as their economic circumstances evolve. I really think if there was ever a stigma, it's pretty much gone.
And if you look at the folks who are very wealthy, their kids may be living in another location physically, but their finances and opportunities remain closely intertwined. I could cite the Trump family as a famous example, not to be political, but just to observe something that is almost taken for granted among the wealthy.
I recently quit my great job in Dublin and moved in with my parents who have a house out in the country.
With my savings and without paying rent or a mortgage I can live for years without having to earn any money.
I'm just doing lots of outdoor activities in the beautiful countryside, indulging various other hobbies like reading, and working on my own little software projects in the evenings. No responsibility at all, no stress, no boss. Its awesome! I'm really happy
I agree. I'm currently living in India with my parents on a sabbatical, and really enjoy the lack of responsibility and work. There is plenty of time to relax and have fun with hobbies. It feels as if this is how life is meant to be lived, with work being something one does once in a while as needed.
Just a reminder that the Priceonomics blog is self-promotion designed to show clients they can get people online to viral-market the website/brand/service for them. The data and how it is presented may or may not be true, but it will definitely be about profitable content. As most of the consumers here seem to respond to the content by clicking through, upvoting, adding personal anecdotes, (perhaps sharing on FB or Twitter?) I'd guess this will be a successful advert.
Perhaps somebody trained in handling data could explain why 10 responses is enough to reflect the rest of a states population. Is it significant that out of 60,000 private data sets the company didn't have 10 from Vermont or South Dakota? If we're drawing conclusions based on geography, shouldn't we be able to determine which states have over 1000 responses, and which have less than 100?
I live with my mother (oh so f*cking cliche-- for a nerd), but as that's due to mental illness (though I think someone did and is doing this to me), I don't think I'm what's being talked about.
If it made strong sense to live with my mother, rather than on my own, then I'd have done so. How it's perceived by others is irrelevant to me. That said, I can't think when I'm not living by myself and I have difficulties getting along with my mother, so this would've never been an option for me. It's bad enough that I'd be better off alone in a high crime, run down, low cost area than with others in an upper class neighborhood.
If many are still living with their parents, then it implies the recession of 2009 is still inflicting damage, but what's annoying me is the notion that what was previously smart, frugal, and sensible gets baked in as the norm (creating more misery for everyone, but without any advantages). That is, living with parents after graduation is done to just survive, rather than to save more and pay off student loans faster. What BS!
mental illness (though I think someone did and is doing this to me)
With apologies to patio11 [1], we really do need a word for "A denial which is phrased in such a fashion as to make listening observers think it is more likely, not less likely, that the thing being denied actually happened."
When I talk about what I'm experiencing, everyone says I'm displaying signs of mental illness. It gets even worse when I say what I think is happening (someone did this to me). So now I say mental illness to have said mental illness, then I say what I really think.
As I said in my comment, "That is, living with parents after graduation is done to just survive, rather than to save more and pay off student loans faster."
My problem is that the advantages/payoffs (more savings, faster student loan payoffs, etc) of sensible/smart behavior are removed, while the misery/discomfort/etc (living with parents, being looked at funny, not being able to be alone) remain (or are made worse).
It's even worse if the idiots then repeatedly bring up the advantages (to excuse themselves of what they did and to make it seem there's nothing wrong with what they are doing), as though they still exist.
You seem to have strongly internalized the notion that only 'losers' live with their parents, and hence it's inherently wrong to do so. I would question that assumption.
It's the US that's the outlier here -- in most countries, living with parents at least for some points in time is the normal thing to do, for the simple reason that it's more economical.
In China it is normal to live with your parents (and even grandparents) all your life -- even after marriage and kids -- so that you can take care of your elders.
What makes you think I've internalized such a thing?
The stereotype is that losers live with their parents. It was fairly common for smarter new grads to live with their parents (to save more money). These days, it seems almost mandatory in many cases, especially if they can't find a job.
That said, even with it being obvious what's going on, the idiots can't resist saying the dumbest thing. But that's them in general: no matter what's going, they are always looking for a way to say something stupid.
As for me, I'm 30 and living with my mother, but I'd definitely rather not be. I'm not living with her to be smarter, it's because I'm unemployed and unable to function due to mental illness (though as I said above, I think someone is did this to me).
Unless you would happen to qualify for public assistance, you'd be nearly starving and exposed to the elements. You simply can't meet basic needs on your own with that without outside support. There are a few exceptions for temporary circumstances (You might be able to farm and live in your paid-off house, for example, but without utilities - and you'd be out of luck when your first property tax bill arrives).
In cases it's not smart to live with parents for financial benefit.
Society could become worse depending on the culture adapting to this if it becomes the forced norm.
Interesting to watch...
California, the most expensive state to live in according to the map that they linked, pokes a big hole in their cost of living argument. It has a lower % of people living with their parents than their national average and approximately the same % as the least expensive state, Iowa.
The 5 most expensive states to live in are 20th, 5th, 3rd, 8th, and 9th in their table. There is a tie for 6th in the linked cost of living ranking and those states are 2nd and 46th in their table. The 5 least expensive states to live in are 21st, 37th, 40th, 30th and 47th. So while cost of living is clearly a factor, it doesn't tell the whole story.
I'm in California. Would 100% live with my parents (as much as I would hate it) if they lived here. There are no jobs where I grew up and went to college, I came here so I could work in my desired industry. I actually tried leaving earlier this year, but could not find a job elsewhere.
Will try again next year. I would be ecstatic to be a home owner and where I'm living I won't be able to until I'm almost 40 (sans quadrupling my salary or marrying rich).
You can construct several plausible hypotheses to explain the data. One is that California's lower percentage may be because many of those surveyed who live in California have parents living in other states.
the thing they didn't explain was how they distinguished between people who live with their parents (in their parent's home) and people whose parents have moved in with them.
Of course traditionally the eldest son inherited the house (and the fields) and the supported their grandparents in their old age in the same house.
China has a unique problem in this respect, retirement essentially consists of the eldest son inheriting the house and supporting his parents (who look after the grandkids). The one child policy means that when a couple marry and have a kid they end up with two sets of parents wanting to move in with the newly married couple, vying to look after the one kid and be supported in their old age. You can see why people have quietly been having more than one kid where they can
>the thing they didn't explain was how they distinguished between people who live with their parents (in their parent's home) and people whose parents have moved in with them.
Because they didn't make that distinction:
>Yet, some who live at home make a wage that should allow them to live independently. Like the older groups in our age analysis, these high earners could be older adults in established households who live with elderly parents to provide, not receive, support.
My handwavy evaluation of the data says that 3% are "people whose parents moved in with them" - this is based on the "Annual Income" graph which basically bottoms out at 3%. And it's consistent with the Age graph, which also bottoms out around 3% except for people above 53 (53+30=83, so a lot of those parents are in a high-mortality age).
So just subtract 3% from all numbers, where that makes sense of course...
When I saw this title I thought it would make an interesting "ask HN" ... Now I see that it's turned into one!
For the record, I moved our of my parents house when I was 20 (I'm not counting living in the college dorms at 17). I love my parents but I couldn't take living with them again.
If your clients come to you for help with student loans, aren't most of these figures blatantly obvious or hopelessly misleading? Think of it this way:
Only 1% of people over the age of 53 needed our help with student loans and also live with their parents.
Almost 25% of people living with their parents in need of our help with student loans have only a high school degree...for now. The company is only 3 years old.
Also, why is the Earnest article titled "Math, Engineering Majors First to Leave the Nest"/"Humanities, Psych Majors More Likely to Live at Home"? Math and engineering majors seemed middle of the road, and in the chart there is no indication that they even factor in graduation. If I have a high school degree, and a student loan and am a client of Earnest I may or may not live at home, but I definitely have a major.
And why do they have data for 48-50 (less than 10 != 0) states if they only operate in 41 and DC?
I read through all of these comments and saw no gratitude at all for the parents and extended families that continue to provide room and board for their adult offspring. :-(
"In general, having more education means it’s less likely you’ll live at home: just 3% of PhDs live with their parents, versus a quarter of those with only a high school diploma."
Never mind that you are probably about 30 by the time you finish PhD so they should have compared high school educated adults of the same age groups.
If anything, this shows that people with higher education are more likely to live with their parents (see associates vs bachelors).
Also, their claim that STEM degree holders are better off than those with social sciences degrees is unsubstantiated.
Edit:
In fact, I'm fairly certain that High School educated adults are less likely to live with their parents than Bachelors educated adults at the age of ~23 and possibly later.
This is because 48% of all adults who live with their parents have to have a high school degree.
Yeah, their interpretation of the data is wrong. 25% of high sachool only educated adults do not live st home. Instead, out of the universe of adult people that live at home 25% are only college educated. A big difference.
Coming out of university with a BS, graduates today are far from well-equipped to perform in corporate upper middle-class jobs (the jobs promising upward mobility). I think this has most to do with an increase in the amount of data companies deal with. White-collar employees need to know not only the ins-and-outs of their industry, but they must also know how to use increasingly complicated enterprise software, and possess more advanced analytical skills to operate with more complicated data. As a result, graduates with a 4year degree are stuck for 5+ years in internship limbo. Companies will bleed money training interns who literally can't offer anything of value and instead will use up the work hours of the skilled employees who train them. Hence, <30k salaries.
I think this is why there is a trend for the more math-heavy STEM fields to flee the coop earlier --they spend less time on the software and analytics training to become valuable sooner.
Certain degrees like health, or design are unlike general STEM fields in that they train students for specific technical jobs rather than teaching broader critical thinking/problem solving. So, they get jobs right out of school (5year engineering programs...?).
PhD's are in the best position to flee the coop quickly because they are paid a livable wage (in most cases) while in graduate school. It's also not terribly difficult to get into a PhD program (completing it is another story). After receiving their doctorate, PhDs rely on tight-knit academic networking within their field of study to do their post-doc. However, this is where many of them get stuck, receiving a salary <70k (often far <). Increasing competition for faculty positions has pushed many a post-doc out of academics (though, by this time I feel they can compete well in the corporate sector).
What I can't explain is law students. I thought there was a bubble leaving most of them jobless. I presume that maybe a law degree is relatively more helpful in scaling the world of big-data (and 'big-regulation') making them prime pickings for corporate jobs earlier than the rest.
I noticed they found a correlation between living with parents and higher education, which isn't surprising, but I think they missed a big component of it, and the effect is certainly smaller than it appears from their visualization.
Higher education correlates directly with an older average age, what would the statistics look like if you corrected for the high-education -> older age correlation? The average age of PhD graduates will certainly make them skip out on the age brackets which are most strongly associated with living at home.
i live alone, in a house in vancouver suburb for 8 years (bought when 22).
i really didnt want a house, was interested in a condo... but parents instilled value of land (they happen to be realtors/housing developers).
i carried a 550k mortgage at 22, earning about ~60k annually.
i have renters in bsmt, so definitely helped.
sure i have a nice house, but i definately wasnt living a life of luxury outside... i envied my friends who lived at home with parents, whose only financial burden was if they had enough money to party on the weekend.
or they spent money on cars, lifestyle etc.
definately now that i am older, a bit more sensible, little worries... am so glad i went through this early on in life.
first of all i am laughing at a bunch of my new neighbours buying a smaller version of my house for only $900,000.00 more than i paid in this recent vancouver real estate market.
second of all, i sure as hell couldnt afford a house here even though i make significantly more here than previously.
for the people that lived at home, to save for a future you might have a chance at home ownership in this market.
if you blew it on cars, extravagant expenses/trips/lifestyle than better hope your family has money to bankroll a house.
i am selling my house for about 140% markup of what i paid even though market definately not as hot with time of year + recent restrictions.
Lots of people spend money in their 20s on experiences: partying, moving, traveling, trying new things... It's sure as hell harder to do all these things later in life with a spouse/kids.
In India (where I'm from) we generally live with our parents (even after marriage) unless of course we have to go to another city for higher education or job. Even then, our 'permanent address' remains our parents' address. Things are changing rapidly here though, mostly in big cities where they live separately from their parents as they get the freedom to do whatever they want and also because it's the new "in-thing".
I wish we had love hotels in the west like they do in Asia so you can have a girlfriend without paying $1100 a month to come home to an empty house after work.
I find it really depressing to live with roommates. I spend 8+ hours a day in an open office subject to other people's opinions (and carelessness) about what should enter my ears. To endure that and then come home to someone watching TV or on the phone is literally hell.
I've traded away 3+ hours/day of free time to the commute so that in the little free time I have left, I get to choose the ambient noise.
At least in college, the library was a short walk and open late. There are no quiet indoor public spaces open after work, sadly.
Good quality noise cancelling headphones can change your life - with no music but just for the sound of silence. The bose qc ones are the ones that did it for me :)
Not all commutes are equal. I'm 30 and live in the 'burbs of NYC with my parents. I spend 1:15 in each direction, but it's all public transportation. I have 30 minutes on a commuter train where I can sit and do work. My commute when I lived in the city was ~30 minutes each direction without the ability to do work. So in all actuality, I've really only lost 15 minutes in each direction while saving $1800+ per month. The math works out in my head.
Yeah, it's the Bay Area. East Bay to SF. There are things other than roommates I could compromise on in order to live closer or go faster (standing on crowded, lurching public transit vehicles, sqft, building quality, neighborhood safety, savings %, entertainment and travel spend), but my current situation (90 minutes each way, but by pleasant means - bicycle and ferry) seems to be the least bad option for my tastes.
