Housing can't both be a good investment and be affordable - <AUTHOR> http://cityobservatory.org/housing-cant-be-affordable_and_be-a-good-investment/ <comment><USER2> A lot of people here are playing semantics and ignoring the message of the article just to be "clever". The message of the article is we can't have our "housing values are always increasing" cake and eat our "housing is always affordable" dream too. If we want to keep housing affordable, we'll have to settle for valuations staying pretty much constant in real dollars forever and resign ourselves to be happy with only the savings opportunities everyone here are so cleverly pointing out.

<comment><USER3> > If we want to keep housing affordable, we'll have to settle for valuations > staying pretty much constant in real dollars forever

This is basically the argument for buying into a co-op rather than buying an apartment. You aren't allowed to flip them for a profit, which means they're less expensive because you're giving up optionality. (At least when they actually are implemented as originally intended.)

To me this makes a ton of sense, because there are a lot of benefits to home ownership for both the individual and society, but real estate generally isn't a good place to put investible dollars unless you're super wealthy and just want some (relatively) predictable income from renters.

What we really need though is public housing for the middle class and upper middle class, rather than just for low-income families. Right now public housing is basically just a scam to transfer money from the middle class to the super wealthy by using money from the middle class to subsidize labor at below a living wage, when in reality everyone needs a house so it's a textbook example of a market where there should be a public option.

<comment><USER4> Co ops are just apartments whose land is owned by a corporation. The corporation usually has a perpetual interest only loan on the land. So when you buy a co op you are leasing the land and own a share in the apartment. You tend to give up options but no one really benefits. I don't know other markets but condos in nyc are prob 30-50% more valuable in part due to these options. It's cheaper but only because it's objectively worse as anyone who had to deal with a co op board can attest. You can make things cheaper by making hem less valuable sure, but that's just destroying value for no reason. Imagine you don't like how expensive cars are so you make it so that you need a background check and waiting period to buy a car. Will new car prices go down? Probably, but that's not a good thing

<comment><USER5> A cohousing community done well can be a dramatically superior quality of life worth _extra_ cost.

[https://www.youtube.com/watch?v=DmWrx0ntATU](https://www.youtube.com/watch?v=DmWrx0ntATU)

<comment><USER6> That's cool, but that's also not what a coop is, at least in the context of this thread.

<comment><USER5> The living arrangements in the video are absolutely co-ops. I'm not sure I get how the context is different, other than that there exists other mediocre (or worse) cohousing co-ops.

</comment></comment></comment></comment></comment></comment><comment><USER7> Great, so you made $50k because your $200k house is now worth $250k - a 25% increase. You now have a family and bigger income and are looking at a bigger house priced $500k. You are really glad that you "made" $50k on your old house.

But wait, if the new house is in the same neighbourhood, it's price increase was probably _also_ close to 25%. If prices had stayed the same, it would be worth $400k today.

So you just gained $50k on your old house but are paying $100k more on the new one.

This is only beneficial if you move from a large house in a popular area to a smaller house in a less popular area.

If you have kids, they might inherit the wealth gained from your housing "investment" - after splitting with their siblings and after taxes of course. Sounds good, until you realise that they will have to spend it all - and put in extra - on housing because of the price increases.

In a world where housing prices stay the same, or become slightly cheaper year by year, everyone is better of. The prices of common utilities such as food and clothing have gone down spectacularly in the last decades while quality has gone up. No one would rather live in a world where these had instead become more expensive. It's time we start thinking about housing in the same way.

<comment><USER8> Could you please describe exactly how could housing get continuously cheaper when there are more people every year and the demand for good locations is increasing?

(Edit: I asked a sincere question. Don't downvote without explanation, please. It's really tiring, anti-discussion and makes it seem like you don't have any good point at all.)

<comment><USER9> Yes, there are more people every year, but in the US, there aren't a _lot_ more people every year. Population growth is at 0.7% and falling.

On the other hand, I see no reason to think that "demand for good locations is increasing". What counts as a "good location" is in flux, but people always want to live in "good locations". I see no reason that it's _more_ important to live in a "good location" today than 5 years ago, or 50, or 3000.

So what I see is a _fairly_ static number of people who'd like to live all over the place, but a decent chunk wanting to live in large, dense, desirable cities. Which are, not surprisingly, quite expensive.

> how could housing get continuously cheaper

Housing, as opposed to land, is a manufactured good, and we're getting better at manufacturing things every year.

As for land, we can use it more efficiently (higher density, fewer parking lots, more transit, etc.) It's well documented that many cities (Los Angeles is an infamous example) drive up the cost of housing and bias new developments towards luxury units due to building codes that, eg, require very inefficient land use and a large number of parking places.

Alternatively, we can work towards changing what is desirable. In 1920 something like 5% of the entire US population lived in New York City; now things are much more spread out. Today a hefty slice of software engineers live (or want to live) in San Francisco, but that's not an immutable law of nature.

I mean, taken to an extreme, if you build an absurd number of houses in San Francisco without sufficient infrastructure, the combination of massively increased supply (all the new units) and decreased demand (because it's no longer a great place to live) would absolutely lead to house prices dropping. That doesn't sound like a good policy (and is certainly not what the parent comment was suggesting!) but there's no particular reason why house prices can't continuously fall.

<comment><USER10> but its not just house prices themselves if you look at a map of value of farmland in the US you will find that more accurately reflects the current house price upward rise.

Example...in NW Indiana farm land is about $35k per acre which reflects the amount of revenue earned per acre. In California its 3 times that.

Its we are running out of farm land acre to feed the world that is driving up the house price in the US

<comment><USER11> Housing can be built vertically.

<comment><USER12> At significantly higher cost. If you'll excuse a very broad brushstroke, this is why California — with lots of land — builds so many single-story buildings compared to the UK where there is so little land available for construction. (That the difference is in part due to policy doesn't change that there is less availability).

I'm looking forward to more automation in construction so that vertical is not significantly more expensive.

<comment><USER11> ==At significantly higher cost.==

Significantly higher building costs, but lower land acquisition costs.

Excerpt from a BuildZoom analysis:

"The high cost of housing in expensive coastal metros is not driven by construction costs. It is driven by the high cost of land which, in turn, reflects a scarcity of zoned units, not a scarcity of land per se."

[https://www.buildzoom.com/blog/paying-for-dirt-where-have- ho...](https://www.buildzoom.com/blog/paying-for-dirt-where-have-home-values- detached-from-construction-costs)

==That the difference is in part due to policy doesn't change that there is less availability==

Except the current policy explicitly limits the availability, they are one in the same.

</comment></comment></comment></comment></comment></comment></comment><comment><USER13> If you don't own a home, you are effectively short the housing market. If you own one home you are neutral: you can't sell it to make a profit because you always need one roof over your head. If you own more than one house, you are a landlord/investor and I don't know why we are giving you special treatment relative to other asset classes.

It would be better for everyone if housing was not an investment.

<comment><USER14> > If you don't own a home, you are effectively short the housing market.

No, the same way that you aren't short on Tesla if you merely don't own any Tesla shares.

> If you own one home you are neutral

Long, actually.

> you can't sell it to make a profit because you always need one roof over > your head.

Yes, you can; you may prefer to have a home, but people do in fact live without them, and, further unless you own the most minimal home allowed by habitability laws in the most inexpensive neighborhood, you can always downgrade while still having a roof over your head.

> If you own more than one house, you are a landlord/investor

That's no more true that it is of "if you own more than the least expensive house possible"; it is quite possible to own multiple homes only for personal use value, viewing them neither as investment for resale or things to rent out.

> It would be better for everyone if housing was not an investment

If it wasn't, how would development happen? It only happens because housing is an investment for the first owners, the one building it.

<comment><USER15> Many things are created with out them being 'investments.' The builder just needs to be able to sell the home for more than the cost of labor, material, and land. The owner buys it as a place to live and not as an investment.

Much like a car - many things are expensive and not expected to go up in value.

<comment><USER14> > Many things are created with out them being 'investments.' The builder just > needs to be able to sell the home for more than the cost of labor, material, > and land.

Spending money on something in th expectation of being able to resell it later for greater than the cost is, exactly, an investment.

</comment></comment></comment></comment><comment><USER16> > ...its price would need to increase faster than the rate of inflation.

If you don't own a home, you pay rent, and rent increases over time. Even if you never made a dime on selling the home years later, the difference between years of rent vs. the total of your mortgage may still come out ahead. Or, keep the house, and live the rest of your live only having to pay property taxes and utilities. Either way, inflation goes up, rents go up, mortgages go down.

I'm not sure that invalidates the larger points within the article. I just worry about the perspective of treating a home purely as an investment when their primary benefit is to be a roof over your head.

<comment><USER17> If you're single or a couple with no dependents who doesn't mind moving every now and then, renting isn't so bad. You avoid the risk of dealing with damage to the structure, fixing things, labor markets being disrupted (like factory towns or smaller towns everywhere in the US). Take all that saved up money and put it in a low cost index fund, you very well might come ahead, and be liquid when you need to move because the jobs disappeared. And rents definitely don't always go up.

<comment><USER18> I've known a few families over the years in California who rented detached houses. They rented houses (didn't have the down payment) to get the benefits of more space (ex: 3-bedroom place), yard (well small yard, this is California), garage, and washer/dryer.

Every single one of them had to move out before their kids grew up old enough to go to college. In fact they didn't last more than a few years at each house because every landlord would come around and ask the renters to move out.

The excuses given were: \- I'm selling the house (turned out it wasn't sold years) \- I'm remodeling the house (nope, not true)

Pretty much in all cases, the owner of the house was forcing the renter out so that they could raise up the rent much higher with the next, new renters.

<comment><USER19> > They rented houses (didn't have the down payment) to get the benefits of > more space

This is just a statement that living beyond your means is bad. Even in markets where renting is cheaper ([https://medium.com/@usaar33/why-you-shouldnt-buy-a- home-in-t...](https://medium.com/@usaar33/why-you-shouldnt-buy-a-home-in-the- bay-area-right-now-9eff37da8d6)), you have to ensure your savings rate is high enough to absorb any reasonable rent appreciation.

Realistically, you might be able to get 20% more house than what you can buy - I imagine your friends were pushing more than that.

<comment><USER18> But you are assuming they were living beyond their means.

They were really not. They were able to find another place near paying similar rent.

The point is the house owners were basically getting around a local laws meant to protect renters against unreasonable rent increases.

Where I live, there is a law against raising monthly rent substantially on an existing renter. Owner can raise the rent for existing tenant say about 3 - 5%, once a year. I'm not sure about the exact percentage, but it is allowed only once a year for sure, to a specific percentage of the existing rent.

So the house owner gets around this law by periodically forcing out the renter with bogus reasons, so that they can rent out the property to the next renter at a substantially higher rate.

Instead of being able to increase rent from $2500 to $2700 after the renters lived there for first 2 years, property owner can raise the rent from $2500 to $3000 or even $3500. The property owner is basically getting around the local law to protect renters.

<comment><USER19> > They were able to find another place near paying similar rent.

I'm a bit confused here. I assume the new place was inferior in some way? Otherwise, I don't see why the landlord would try to force them out if they are paying market rent.

<comment><USER18> Well it seems some owners seem to think they can beat the market and get higher rent by chasing renters out every few years. So they can raise rent by 7- 10% instead of just say 3%.

</comment></comment></comment></comment></comment></comment></comment><comment><USER20> The real problem is that there hasn't been any attempt at policy changes to correct this. In order to do so, society needs to chip away at the problem in steps.

Right now, real estate is simply a good investment regardless of everything else because of the tax benefits of transferring properties to heirs. Depreciation and tax bases are reset, essentially making real estate a double whammy of tax benefits for the current owners as well as their heirs. Depreciation means tens of thousands of dollars saved in taxes per year per property. Transfer benefits means never having to pay that back due to generational reset. Take away the transfer and estate benefits first.

Once that first dent is made, the wealthy/NIMBYs will naturally vote for the next correct move, which is to take away policies that make housing unaffordable to their own children. As the law is right now, there is no incentive for land owners to be altruistic to society because their children are sheltered from affordability problems due to transfer benefits.

My wager is that all it would take is removing transfer benefits on commercial properties (e.g. like kind exchange, or enforcing depreciation recapture upon transfers, including 1031) to see the first domino fall on the way to an eventual partial rollback of laws like prop 13 and more property development due to fewer NIMBY incentives. That's a very small bite to chew that leads to much greater changes down the road because it realigns incentives tremendously.

I say this as someone who has Bay Area real-estate. The strategy to reverse things doesn't exist at the moment.

</comment><comment><USER21> This article misses two points that are so basic that I'm shocked. 1) Home prices don't need to go up in order to make it a good investment 2) Banks pay a huge percentage of the cost of buying a house, but the consumer keeps 100% of the profit.

To use the example in the article, if you bought a house for $200,000 and sold it ten years later for $256,000, you didn't only make $56,000. You also paid down your mortgage over that time. A typical mortgage isn't much more than rent, so minus interest, that's more money for you. Also, you only needed to put down $40,000 and the bank paid the other $160k for the house purchase. So for $40k plus the cost of rent, you did pretty well. You also would have done better than renting if the house had only appreciated half as much.

<comment><USER22> > Also, you only needed to put down $40,000 and the bank paid the other $160k > for the house purchase.

In this scenario the bank just creates the money out of thin air. And then they get to keep all of the interest payments.

So, yeah, it's good for the home owner, but it's _great_ for the bank -- so long as most people keep paying back their loans.

</comment></comment><comment><USER23> Housing is always going to be expensive in desirable areas. No amount of social justice or zoning reform is going to make mid-town Manhattan or downtown SF easily affordable for anyone who wants to live there. Sure, these areas are culturally vibrant but the real draw of high cost of living areas is the job opportunities. Many people would gladly try out a different area of the country or move back home if only the job prospects were reasonable. I think there's much more bang for the buck in economic revitalization than trying to make every city in America "affordable". Although opposed to government intervention in general, I am much more in favor of proactive, growth-based policies than reactive redistribution-minded reforms.

</comment><comment><USER24> Most points also apply equally to the Australian housing crisis in Sydney and Melbourne. No mortgage interest tax deduction here for home owners, although there is for investors, among various other incentives. Governments consistently fail to do anything about affordability because they're too worried about "mum and dad" investors (not to mention their own portfolios[1]).

[1] [https://www.businessinsider.com.au/australias-federal- politi...](https://www.businessinsider.com.au/australias-federal-politicians- own-a-staggering-524-properties-2017-4) "Australia's 226 federal politicians own a staggering 524 properties ..."

<comment> hugh-avherald No mortgage interest tax deduction for owner-occupied dwellings but the exemption of capital gains tax is far larger in terms of revenue foregone.

<comment><USER24> Probably; they're both massive, no doubt about that. Interest rates are low right now, but in general you're probably paying around double the value of a property over a 30 year mortgage, that's a sizeable tax deduction.

</comment></comment></comment><comment><USER25> This is only a contradiction if the type of housing remains constant, which it does in low-development, high-construction-cost markets like San Francisco where public policy prevents the modification of (almost) any housing to increase density.

Here's how it would work otherwise: family buys single family home in year A for $100k. Lives there for a while, then sells in year B for $200k. The buyer is a developer, who then constructs a larger building on that same lot consisting of 4 apartments that now each sell for $100k again. Original family gains in wealth, developer makes tidy profit, new families can still buy a place to live for $100k. All numbers inflation-adjusted, you pick A and B to make whatever return you think is reasonable.

This is how densification happened almost everywhere until zoning laws stopped development mid-century.

Note what you don't get out of this arrangement: a neighborhood that doesn't change for 40 years; the ability to live in the same type of house your parents did, in the same neighborhood, for the same price. But you could have the same amount of (indoor) space they did, and outdoor space through public parks and the like.

What's not sustainable is everyone having a suburban style detached single family home without increasing density in perpetuity. _That_ is what leads to this contradiction.

The non-density alternative is sprawl, where prices rise in long-established neighborhoods, and outlying new developments are where you can buy new houses for less — which is what you see all over California.

</comment><comment><USER26> Surprisingly, no one has discussed the transaction costs of real estate, which takes a large bite out of any potential gains. You don't necessarily come out ahead when you sell, even in a growing market, once commissions and attorney fees are paid.

<comment><USER27> I tend to rent despite owning real estate.

I tend to move often and only buy real estate if I'm willing to hold it forever. So I buy what I think is a good long term investment and live where I want to live.

</comment></comment><comment><USER28> _While funds for low-income subsidized housing languish, much larger pots of money are set aside for promoting homeownership through subsidies like the mortgage interest deduction and capital gains exemption, most of which goes to upper-middle- or upper-class households._

Looking for reasons why house price increases outpace inflation? These two US tax policies are a big part of the answer.

Commentators bewailing the high price of housing and wealth inequality rarely even discuss these two massive giveaways. Deficit hawks rarely point to the mind-boggling amount of tax revenue left on the table by this federal government dole.

Ending the mortgage deduction and the capital gains exemption would be a very effective and quick way to bring about housing affordability and promote wealth equality.

But any representative proposing such a solution would be committing political suicide today. Still, it's interesting to think about the conditions that might be necessary to force a change in sentiment on the issue.

</comment><comment><USER29> I once read an article about how in Japan wealth does not accumulate from generation to generation. The article went on talking about housing valuation and how homes devalue instead of appreciating in value of the course of their life. He article made it sound like a terrible thing. Of course, if you look at it from a personal perspective it IS terrible not being able to pass on appreciated properly to your kids. Who doesn't want their family to be better off from generation to generation?! But if you think about it from affordability and societal perspective, it isn't so bad to have your property remain the same value or depreciate. Of course there are other issues to debate there such as environmental pollution that comes with wasted resources every time you build and scrap a new home. The upside is having to live in a new house that's more affordable than in the western nations.

</comment><comment><USER30> I would gladly buy a house that cost it's value in parts and labor and sold for the same amount + inflation decades later.

I just don't need or want an investment like that.

<comment><USER31> You'll get ripped off. New homes depreciate quite a bit because of the ongoing cost of maintenance after 7-16 years. (Except in the Bay Area.) The catch is that inflation usually hides the depreciation.

You will find this out if you ever compare the cost of a new home to an older home, or plan to build your own. Where I live, a 15-20 year old home is about 60-80% of the cost of a similar new home.

<comment><USER30> Yeah I hear you. I'm not speaking of buying a new home in today's world. I'm speaking of a hypothetical world where homes weren't priced as investments, they were priced as products.

And I do appreciate why it doesn't work that way.

<comment><USER31> > homes weren't priced as investments, they were priced as products

Careful there, you really need to understand the difference between an investment and a product.

I bought a very nice lawn tractor as an "investment" so I wouldn't have to pay someone to mow my lawn.

The land your home is on is always an investment. Land doesn't depreciate like a product does.

But even then, when you use the term investment, I think you conflate "for profit" versus better deal. A home can be an investment as long as you have a tangible benefit over renting. That can be anything from lower long-term cost, to having the exact kind of living space you want.

For example: I owned a home for a little over 3 years before I had to move. We sold it for inflation + cost of some improvements, and at the end it was slightly cheaper than renting... But we enjoyed the house so much more, and the house was in much better condition than a rental. We were able to do things like install an electric car charger and central air conditioning; things that would be much more difficult in a rental situation.

</comment></comment></comment></comment><comment><USER32> Seems to ignore the idea that as long as supply can increase, and a single house can be converted to a block of 6 units, housing _can_ be both a good investment and affordable. I think the problem is that while development currently benefits house owners, apartment owners have no incentive to increase supply. We need to tax property development and distribute it to all local households. In this way it won't just benefit house owners and it will have much greater support from locals.

</comment><comment><USER33> Housing is a cost and a necessity. The goal with housing is to minimize both cost and risk.

Renting and ownership both carry their costs and risks. We have not had inflation for a long time, but I remember the Carter years where we had inflation and people who rented were in a world of hurt. Owners had no such problems. The 2008 crash hurt owners, but only if they had to sell. At least where we are, prices are more than fully recovered.

Since you need housing for your whole life, you have to take into account these sorts of historical occurrences. If you are an owner, you can ride out most of these things. If you are a renter, your rent will go up unavoidably.

Ownership is the best approach to avoiding cost/risk, but only if you (a) build up a 20% minimum down payment, (b) attack your mortgage and pay it off early, (c) have a minimum 6 month emergency fund (which you should have whether owning or renting).

If you approach ownership like a rental, only looking at the monthly payment, you are taking a big risk and subjecting yourself to higher cost and risk. The same can be said about renting, though. What will you do if you lose your job and do not have a 6 month fund built up and have to pay rent?

Having a paid off home and not having to worry about rising rents contributes to peace of mind, and opens the door to other life modes, such as early retirement or taking extensive time off.

<comment><USER19> > We have not had inflation for a long time, but I remember the Carter years > where we had inflation and people who rented were in a world of hurt. Owners > had no such problems.

I could see how an owner with a mortgage benefits with unexpected inflation, but why our renters hurt? If their incomes rise with inflation, shouldn't it be neutral?

> The 2008 crash hurt owners, but only if they had to sell. At least where we > are, prices are more than fully recovered.

You can't ignore opportunity costs. The question is how would an owner on a mortgage performed if instead they were renting, had lower payments, and directed additional savings into the stock market?

<comment><USER33> What would you do if your rent went up 10% - 20% a year? Rents follow inflation.

As for opportunity, there is immediate opportunity and deferred opportunity. You could chase the stock market now, and have no gains for 10 years, or great gains. If you buy a house and pay it off, you guarantee lower expenses going forward.

If you're the grasshopper, then by all means rent. If you're the ant, then buying probably makes more sense.

<comment><USER19> > What would you do if your rent went up 10% - 20% a year? Rents follow > inflation.

So does my salary expectations.

Not getting the ant/grasshopper metaphor. The trade-off is solely a function of risk ability & willingness (higher risk tolerance pushes toward renting more), not hard work/lazing. In certain markets buying looks bad if you have high enough risk tolerance to handle stocks:

[https://medium.com/@usaar33/why-you-shouldnt-buy-a-home- in-t...](https://medium.com/@usaar33/why-you-shouldnt-buy-a-home-in-the-bay- area-right-now-9eff37da8d6)

<comment><USER33> In inflationary times, your rent will likely outstrip any salary increase. I suppose if you work for the federal gov't or something you might get cola, but I wouldn't count on it. The Carter years were hard times.

I didn't mean the metaphor in an negative way. The grasshopper likes the lifestyle of pay as you go. The ant worries more about a possible winter coming.

</comment></comment></comment></comment></comment><comment><USER34> Well housing is a good investment once you pay it off and stay in that home for an extended period of time. The problem is people just want buy ever larger homes. I mean look at the average square footage of homes in the 1970s which was 1500 sqft and by 2014 its 2,657 sqft ([https://247wallst.com/special-report/2016/05/25/the-size- of-...](https://247wallst.com/special-report/2016/05/25/the-size-of-a-home- the-year-you-were-born/11/)). People are buying way over their means.

I purchased a 1800 sq ft home when I was 22 that I am still living in today (I am 45) with a 15 year fixed mortgage. I paid the mortgage off and have lived rent/mortgage free for the past 8 years. Assuming I live here for another 12 years, that will be 20 years of rent/mortgage free living. And yes I am married and have a 2 year old.

And when I do eventually sell, I will get back all the interest I paid and then some even adjusted for inflation. The problem is people just keep jumping int every larger homes. As soon as they can.

</comment><comment><USER35> It can be when borrowing terms are artificially loose.

Imagine a world in which you can get a zero-ish percent interest-only loan. The "value" can keep going up even though the monthly cost remains low until the end of the term at which point you sell to someone else for even more money at a zero-ish percent rate.

<comment><USER36> Who is giving out 0% loans forever, when they could be buying up real estate instead?

</comment></comment><comment> village-idiot Houses shouldn't grow in value for well established areas, they should roughly track with the population and inflation. If demand hasn't changed, why should homes change value?

Aside from homes slowly rotting, that is. In fact that should _reduce_ the value of a home over time.

</comment><comment><USER37> So one might consider "the original intent" of your home as an investment to be something other than throwing your money at rent. If I put $2000 towards rent in a month, I have a place to live that month. If I instead put $2000 towards a mortgage, I have some of that money in equity (and a place to live for a month). It "builds wealth" in that some of my monthly spend is resulting in value for me beyond the place to live for those 30 or so days. I think if people are generically looking to treat their home like any other financial instrument, they're courting danger.

<comment><USER38> Except a $2000 rent will not get you the same place as a $2000 mortgage.

</comment></comment><comment><USER39> Gambling using housing as gaming pieces was fun in monopoly. Then late-night TV started encouraging people to do that in real life.

Until there is an affordable HOME for all US citizens who need one, we in the US need to stop thinking of them as HOUSES and stop them being used as gambling chips.

As for public-housing, it needs to be permanently off-limits to speculative investing. Otherwise why should the well-intentioned public agree to investing their tax dollars in public housing? Ownership of these HOMES should only be available to people eligible for public-housing.

</comment><comment><USER40> Supply and demand in the housing market is not about the supply of houses but about the supply of CREDIT.

As long as the banks are happy to lend large sums at low rates prices will go up, and as soon as the banks become more cautious, either raising rates or restricting how much they will lend, then prices will fall.

I'm sure many will continue to blame immigration but I challenge anyone to come up with any solid data to back up that claim.

We have seen this happen before and that wasn't because millions of people suddenly left the country overnight.

<comment><USER41> Exactly.

And people still want to pretend that owning a home now is good diversification from the stock market which now is also filled with companies that are utterly dependent on the supply of credit.

The pressure on RE market is already keeling over, not just in the US but around the world (thanks to CB's following largely the same policies for so long in this synchronized "recovery").

</comment></comment><comment><USER42> I don't know, social housing is a good investment for society. Giving everyone a decent roof over their heads isn't just good for karma but also social and political stability.

Not cheap though.

<comment><USER43> It actually is cheap. But we have tons of laws that outlaw cheap housing because it "causes" "undesirable" neighborhoods.

</comment></comment><comment><USER44> We need some big strokes to fix this. Personally I think the long-term solution, at least in CA, is for the state to buy out owners in critical areas, taking land with eminent domain as a last resort, then selling the land back to developers on the condition that density is tripled or quadrupled. That's the only way to move the needle. Doesn't everyone ask you, when visiting from out of state, "why don't you guys just build _up_?"

<comment><USER45> In California we could easily solve the housing shortage by eliminating prop 13.

Because land isn't taxed based on it's current value landowners have little incentive to develop their land in order to get the most out of it. They simply bank land as much as possible as it's the most surefire way to turn a profit. It's why we have golf courses ([https://www.planetizen.com/node/93284/la-country-clubs- takin...](https://www.planetizen.com/node/93284/la-country-clubs-taking-more- their-share-and-paying-less)) in city centers, dilapidated shacks ([https://www.theguardian.com/technology/2016/dec/15/google- ca...](https://www.theguardian.com/technology/2016/dec/15/google-campus- silicon-valley-farm-martinellis)) next to Google's global HQ, and empty lots ([https://www.zillow.com/homedetails/811-Pelton-Ave-Santa- Cruz...](https://www.zillow.com/homedetails/811-Pelton-Ave-Santa-Cruz- CA-95060/96053991_zpid/)) right on the beach in Santa Cruz.

Additionally, prop 13 gives landowners every incentive to lobby for policies that restrict development in order to drive up prices instead of fighting for the right to build 4 story apartments on their property.

Impact fees are too high because cities can't rely on property tax. This stops all but the most luxurious developments: [https://lao.ca.gov/publications/report/3497#Did_Proposition....](https://lao.ca.gov/publications/report/3497#Did_Proposition.A013_Increase_Fees_on_Developers.3F_)

And then there's the fact that prop 13 transfers wealth from young to old, from poor and middle-class to rich, from black and Latino to white, and from renter to owner ([http://www.betterinstitutions.com/blog/2015/07/prop-13-calif...](http://www.betterinstitutions.com/blog/2015/07/prop-13-california- broken-property-tax-part-1)). Making it harder for people to save up in hope of buying one day.

<comment><USER46> Yes. I understand why prop 13 was passed, it was in a time of high inflation, and the increased valuations meant that property taxes had a huge impact, especially on retired people with fixed incomes.

But all the downstream effects of that have made rather large distortions in the housing market.

</comment></comment></comment><comment><USER47> The gain on your house will never outpace the interest on your mortgage. Houses as wealth generation (in this simple way, they're still obviously better than nothing and helpful to borrow against) is essentially a scam literally sold by banks. You'll pay $170k on a $100k house over 30 years. If you put that same $70k in Vanguard you'll have over $400k after 30 years (at a modest 6% return).

</comment><comment><USER48> Housing is f'd up b/c of some combination of Baumol's cost disease and ZIRP. Just not sure how to correctly apportion the blame.

</comment><comment><USER49> "Affordable housing and rising home values are mutually incompatible."[1]

[1] [https://medium.com/yimby/why-a-healthy-housing-market-is- bad...](https://medium.com/yimby/why-a-healthy-housing-market-is-bad-for- people-bd48a5399686?source=user_profile</comment><comment>---42</comment><comment></comment><comment></comment><comment>)

</comment><comment><USER50> My counter to this article is that you have to live somewhere. So you either rent a big chunk of money that you can use to buy a house, or you rent housing directly. If the principle, interest, taxes, insurance and maintenance is about the same as renting over the course of a number of years then you are better off buying.

The risk is that you may need to move before you are at the break-even point. And risk is sometimes location dependant (how varied are the industries that provide good employment in your area, etc). And you risk rising costs (I wasn't prepared for property taxes and insurance to outpace inflation 4 to 1, for example).

But the biggest mistake that I feel people make (at least in my case) is getting more house than I needed. I would have been better off getting a much smaller / less desirable property that I could have paid off in 7 years, instead of the 30 year mortgage. Because then after 7 years, if property rates rise, well I can sell and have more money for a down payment on a better house. And if the fall, I can still sell and put the money down on the same better house, which is also much cheaper (assuming similar area / cost of living).

<comment><USER51> But can't you also just sell the 7 years worth of equity you've built up over the start of a 30 mortgage almost as well?

I will concede that the downside risk is higher with the (initially) higher priced property.

<comment><USER52> In a conventional mortgage, the proportion of interest you pay is frontloaded so that you're paying much more interest in the beginning of the loan. So in the first 7 years of a 30 year mortgage, you will have paid some principal, but the majority was interest.

</comment></comment></comment><comment><USER53> A nice economics research article I read a while ago basically showed that housing prices increase with inflation except in cities like San Francisco, New York Manhattan or Vancouver that have strict building rules or physical limitations.

</comment><comment><USER54> The best thing we can do to have affordable housing used to increase the supply of housing. If we increase the amount of high-density zoning and reduce the amount of permit difficulties, housing will become much more affordable.

</comment><comment><USER55> Housing in some cities = SoV (Store of Value) for foreigners... NYC, Miami, etc.

Nothing to do with investment, all about getting money out of dubious places in the world. Anonymous LLC and Done.

Imagine if they plowed all those dollars into Bitcoin instead.

</comment><comment><USER56> Housing in the Bay Area is stupid expensive. I bought my 2900sqft 9 years ago for $129000 and it's now worth about double. This is a bit better than average for my city. My city is one of the 15 largest in the US.

Edit: I don't live in CA.

<comment><USER57> Double in 9 years is like 8% annually which is roughly equivalent to putting it in index funds.

<comment><USER58> But you only put 20% down.

Let's say your 100k house is now 200k. Your initial down payment is 20k. When you sell your getting much more than 8% compound interest

<comment><USER59> they also ignore the fact you are saving in rent, and you can also rent out your spare rooms (I did).

My house was and still is very affordable and it was one of the best investments I have done.

they are not mutually exclusive objectives once you consider everything.

<comment><USER57> You're also paying mortgage interest, taxes and maintenance costs. The formula isn't straightforward but owning a home is rarely a better strategy than renting and buying stocks.

<comment><USER59> Homes appreciate on average 3-5%, where as the money saved on rent - taxes, interest, and maintenance is somewhere between 3-5%.

that's 6-10% (which is about the best you can expect from stocks over the long run)+ the other benefits of owning a home. I for one rented 2/3 of my rooms for an additional 12k$/year income (60k over 5 years).

</comment></comment></comment></comment></comment></comment><comment><USER60> My friend would have paid $40,000 more in taxes this year if he didn't have an a single family rental to depreciate, so perhaps gains vs inflation isn't as straightforward a measuring stick as you would assume.

<comment><USER61> Your friend will have to repay those taxes when he sells (assuming there is profit above the then-depreciated value). Seems like a lot of people don't know this.

Yes it is true that the tax rate is capped at 25% (which is sometimes less than the normal marginal federal rate you would pay) and there are ways to defer the tax bill further but it's not just like free money that the government gives up on collecting from you.

<comment><USER62> _If_ he sells.

We have a bunch of rentals around here and we have no plans at all to ever sell. And when we die the tax basis for our kids will be the value of the properties at our time of death. (And I think they can even start using depreciation again.)

<comment><USER61> Agreed, the step up in tax basis at time of inheritance is really the problem with that though. Which is a problem regardless of depreciation.

The new tax law that was passed I thought might eliminate that loophole, but the proposal was nixed in the final bill.

<comment><USER46> A lot of the simplification and rationalization that was the initial selling point for the tax bill somehow got traded in for large tax decreases for the wealthiest before it was signed. In my generous moments I think that they really did intend simplification and were simply bowled over by the other interests.

In my less generous moments I notice that they keep saying that they are doing A, and instead do B. Again and again.

</comment></comment></comment></comment></comment><comment><USER63> Kind of shows that at end of the day, the issue is political and depends on who wants what. We can stop housing price increases and decrease future profits gained for current homeowners.

</comment><comment><USER64> The major flaw I see in this analysis is believing the only way to build wealth by "investing" in home-ownership is _increasing property values_. It completely ignores the equity one builds while paying down a mortgage. If one intends on staying put for a while (even just a couple-few years in some cases) then one _can_ build wealth through home ownership without runaway property valuation. Money is "lost" on interest payments, but if you are leasing a home, you're paying someone else's mortgage and interest[0].

[0]: Not necessarily the case, but it works for simplicity's sake.

<comment><USER65> Even if prices are stable, what makes it the case that the system works so well for those who own land and creates such problems for those who are landless?

We take it for granted that renting is just a form of having your money stolen by landowners, without realizing that this is a choice we make: we could just as easily administer the market so that absentee ownership ceases to be a smart bet.

<comment><USER66> > administer the market

That's a scary idea. There are massive unintended consequences to such a strategy of reducing the benefits of "absentee" ownership. Almost every private rental property in existence is the result of absentee ownership. A move to disrupt that would result in a dramatically reduced supply of rental properties. Not everyone has the resources, credit or responsibility to own their own home. The financial crisis of 2008 was trigger by a whole bunch of people buying when they shouldn't have. The places where people try to "administer" the market either through aggressive regulation or capping rents through rent control have the most inefficient and expensive markets.

<comment><USER65> It's interesting that you jump to "aggressive regulation" or "rent control" instead of the solution that has close to full consensus from the economic profession: [https://en.wikipedia.org/wiki/Land_value_tax](https://en.wikipedia.org/wiki/Land_value_tax)

<comment><USER67> LVT is a good policy but it doesn't make land ownership a bad investment. It just tends to decrease the price of land, which is not usually a problem because land is not produced by people, unlike other securities.

<comment><USER65> The reason that land is a good investment is precisely because of future land rents that a land buyer expects to receive.

If these land rents are instead paid towards a tax, how wouldn't this make land less of a good investment?

</comment></comment></comment></comment></comment></comment><comment><USER68> Yeah. Since corporations decided to charge whatever the market would bear, things everyone need, like housing and health care, have gone crazy

<comment><USER69> Yes. Consider the price of any orphan drug that Valeant touched. Syprine went from USD 625 per 100 pills to USD 21000, and despite the combined and very reasonable protestations of Hillary Clinton and Elizabeth Warren, the price still hasn't come down.

</comment></comment><comment><USER70> You can buy a three bedroom house in Topeka, Kansas for $75k. Regressive taxes are a much bigger problem.

</comment><comment><USER71> I call bullshit.

Take housing in China. You can buy a place in China, but making money off of it with rent? Good luck.

It's a common problem that people who can afford to buy a place, can't rent it for a profit if they are still paying a mortgage.

Why that is, I really don't know. But the fact is, it can be possible to have cheap rent available, if the owners are willing to not make a profit. But that's just not how capitalism works.

</comment><comment><USER72> This isn't true if you are an actual property investor - cheap housing has a better rental yield. If you want to live in a house and have the price shoot up while you do so then fair enough, that only works if prices shoot up.

</comment><comment><USER73> Home ownership is only a good investment if the system is broken.

</comment><comment><USER74> Something I've been wondering about: Would it be a good or bad idea to tamp down on the whole concept of housing as an investment?

It seems fundamentally problematic, but is there any alternative workable system that wouldn't have unintended consequences?

<comment><USER75> In Asia, house value is like car value. People want to buy brand new ones, and the minute it's used, it's worthless. People can live in their old house as long as they want to, but young people would prefer a clean new house free of mold (humidity makes it inevitable) and other problems and they can get a new house relatively affordably.

It works very well. The fact house prices in America/many Western countries increase with time is an anomaly that applies to no other item as far as I know, barring the odd historical/valuable antiques. But nobody can predict their value 10 years from now.

<comment><USER76> What about an old mouldy home in a super desirable location?

Also is brand new outweigh renovated?

<comment><USER77> Tear it down and build it over, especially if you're an investor and can buy a bunch of mouldy homes on a block.

Example in the US is smaller suburban houses that happen to be located near commuter rail stations. They are torn down and replaced with new, bigger houses. The neighborhood across the tracks from my house is another example: Doctors and professors have bought and "renovated" all of the smaller houses.

I notice something similar with hotels. My experience in a hotel is 100% proportional to the age of the hotel. The newer the better. Hotel owners rarely renovate unless they are in super prime downtown locations. They just let the hotel deteriorate while lowering their room rates while someone builds a new hotel next door.

</comment></comment></comment></comment><comment><USER78> So what's a good investment?

The stock market? But I'm not exactly providing any value when I invest in a stock as my money doesn't go to any company that needs funding.

Bitcoin? But that wastes energy and again, doesn't provide much value to society, if any.

Gold? But again that doesn't seem to provide much value to society.

Real estate seems to be the only venue where I can make a return on my value, and provide _some_ value to people.

And now, some people want to take that away.

<comment><USER79> > Real estate seems to be the only venue where I can make a return on my > value, and provide some value to people.

What kind of value are you providing by purchasing a house, not living in it and not selling it? When you purchase 2+ house where you don't live - you are basically removing it from the market - thus increasing the demand/offering ratio and inflating the prices?

<comment><USER78> What about renting it out to people? isnt that providing value?

<comment><USER24> Depends; if they're only renting because prices have been pushed out of their reach by speculators, then not really.

Some supply of rental property is required, but much less so when housing markets are not out of control.</comment></comment></comment></comment>


Sweden's Job-Security Councils Make Layoffs Easier - <AUTHOR> https://www.theatlantic.com/business/archive/2017/10/how-to-lay-people-off/543948/?single_page=true <comment><USER3> My anecdotal experience, from having lived in Sweden and worked with Swedes for some time now, is that actually firing someone in Sweden for performance reasons is quite difficult for both cultural reasons and worker protections. So this might make the process of widespread company layoffs easier on the employee, but it's not something that makes the workforce significantly more mobile, at least from an outsider's perspective.

<comment><USER4> The harder it is to fire someone, the more reluctant companies will be to hire people, and the more choosy they'll be.

<comment><USER5> You make it sound like "more choosy" is a bad thing. Aren't all the big technology companies choosy about who they'll hire?

The numbers given the essay suggest that Sweden's employment rate is not unusually low, so is your comment really a meaningful basis for making a policy decision?

When it's easy to fire people, it's also easy to fire people for personally motivated reasons, rather than reasons which are good for the company.

For example, the boss might want to fire someone to bring in a family member. Nepotism isn't illegal. But the union contract helps prevent these sorts of (non-business related) firings.

People tend to work better when they aren't worried about being fired for reasons that have little or nothing to do with their job.

<comment><USER4> > You make it sound like "more choosy" is a bad thing. Aren't all the big > technology companies choosy about who they'll hire?

Let me rephrase - less willing to give someone a chance who may not have done well in the job interview.

> employment rate is not unusually low

Wouldn't that also suggest that finding another job won't be difficult?

> fire people for personally motivated reasons

Why would you want to work for someone that dislikes you and doesn't want you around?

> People tend to work better when they aren't worried about being fired

A workplace where people hate each other doesn't sound like a happy place, either.

<comment><USER5> I understand the model you are presenting. My question again is, is it useful enough to guide policy decisions?

Based on the information given, it doesn't seem like it is. Perhaps there are other mechanisms in place (like this job-security council) which compensate?

How would you expect the Swedish job market to look if employees didn't have these protections?

You ask: "Why would you want to work for someone that dislikes you and doesn't want you around?"

Here's an example from the blog of a small-town teacher I read. If you are a teacher, and coach Little League baseball, and the principal puts pressure on you to place the county education board member's grandson on the team (say it's from pressure from the board member), then who's going to back you if you refuse, and end up on the principal's bad side?

Or are you going to quit your job, uproot your family, and move away? Because it's likely not easy to find another teaching job in the same small town.

To put it another way, why is it that if 1 person dislikes you out of the 40 or 50 people you work with, and that person happens to be the principal, then you have to leave? Why does he deserve that much power over you?

<comment><USER6> Your example, which I presume is from America because we have Little League and counties, involves a public institution.

In a private institution the person paying you money to do stuff for him deserves the power to stop paying you money because it's _his_ money. It's also the employee's ability to make contracts that you're talking about -- you'd hinder an employee's ability to agree to a contract with a lower risk of employing them.

I happen to find it convenient to be able to agree that if somebody doesn't like my output they can stop paying me. It's part of how I get them to start paying me in the first place. You would take this freedom to make contracts away from me. Presumably because you think you know better, and by taking away my freedom, you enhance my negotiating position.

Why do you deserve that much power over me?

<comment><USER5> Yes, I am an American, and the teacher from a public school in the US. The examples are easily transferred to private industry - I can be a volunteer Little League coach while working for a private company, and my department head wants to be on the good side of the CEO whose wants his grandson to be on the team.

"In a private institution the person paying you money to do stuff for him deserves the power to stop paying you money because it's his money"

Yes, I believe one of the "other mechanisms in place" in Sweden compared to the US is that Swedish workplaces are more structured around consensus and democracy, while US workplaces are more hierarchical and control-based - <USER2> sort of mini-monarchy.

"I happen to find it convenient to be able to agree that if somebody doesn't like my output they can stop paying me."

I believe Swedish companies can fire people who are unable to do their job. The question is, do you find it convenient that you can be fired for reasons which have nothing to do with your job? The Little League example is one. How do you feel about not being paid because your boss wants to hire a poorly qualified relative instead? Or not being paid because you refuse to work on weekends?

"You would take this freedom to make contracts away from me. Presumably because you think you know better, and by taking away my freedom, you enhance my negotiating position."

I did not understand this argument. What essential freedoms are taken away from private Swedish companies or from employees in Swedish companies? How has this had detrimental effects on the Swedish economy or lifestyle?

<comment><USER6> > The question is, do you find it convenient that you can be fired for reasons > which have nothing to do with your job?

We can't separate this from being fireable for being bad at your job, or for making others hate going into work because you're insufferable or a sexual harasser or just undesirable to work with.

> How do you feel about not being paid because your boss wants to hire a > poorly qualified relative instead?

Perfectly fine. It's _his_ money. If he wants to spend it unwisely, he's welcome to. And I'm not "not being paid." I'm "working for somebody else."

> Or not being paid because you refuse to work on weekends?

That's not the matter under discussion. You can already sue over not getting paid, or you can work somewhere else if they want the deal changed.

> What essential freedoms are taken away from private Swedish companies or > from employees in Swedish companies?

The freedom to agree, "You'll pay me money to work for you and either of us can terminate this agreement at any time."

The ability to freely partake in economic activity is essential.

> How has this had detrimental effects on the Swedish economy or lifestyle?

See the inability of immigrants to integrate into the Swedish economy and Swedish society.

<comment><USER5> It sounds like you also disagree with laws which are in place to prevent sexual harassment and prevent discrimination on the basis of race, religion, nationality, etc.

After all, these laws also limit your freedoms in the sorts of economic activities that can be done at work. If that's the case, then I consider your views too idealistic and unsuitable.

And I've read the EEOC guidelines. There are many precedents which show that being a sexual harasser _is_ separable from being "just undesirable to work with". There's no bright and clear line, but if that's what you require than you demand the impossible.

You also don't seem to understand why some people would rather be an employee, and not simply be a contractor. Many people want a longer-term, more stable position, the ability to influence work conditions, get respect, etc. and as jernfrost pointed out at [https://news.ycombinator.com/item?id=15578545](https://news.ycombinator.com/item?id=15578545) lack of these factors will cause resentment and disloyalty, and people will "tend to give less shit about their company because they know the company is never there to have their back".

In order to judge "the inability of immigrants to integrate into the Swedish economy", what factors do you use to compare it to the US? Because I seem to recall a lot of integration problems in our own history. And hasn't Sweden taken in a lot more refugees recently than the US has? I heard many US politicians who didn't even want to try to integrate Syrian refugee orphans. I think that has to count in the negative column.

</comment></comment></comment></comment></comment></comment></comment></comment></comment><comment><USER7> Funny, Swedish outsourcing centers in CE Europe don't have councils. They just pay half of Swedish salary, demand obedience, and fire at will. Job counseling those laid off? No such thing. Someone has to work for and pay for their luxurious conditions back home. You're welcome, Swedes - hope you'll choke on your redundancy packages.

<comment><USER8> Yes a lot of European companies that behave well at home behave badly overseas I know of one that artificially bankrupted a uk subsidiary to avoid paying the statutory redundancy payments.

They called every one to a meeting said where bankrupt you don't have a job and there's a pile of RB2 forms over there. Th Rb2 form is to claim the much reduced redundancy payment from the state, when the parent company could have paid the statutory redundancy out of petty cash

<comment><USER9> This is why worker protection laws are so important. All big companies will behave sociopathically in order to maximize profits. It's only through government regulation that such anti-worker behavior can be limited and controlled.

<comment><USER10> This is why worker protection laws are so dumb. You just can't force other people to give other people money, they'll always find a way not to. Worst case they'll just practically never hire people in your country. So those people are desperate to get into another country without those worker protections, e.g. US or UK or NZ, so they can get a job and make some money. This is happening in France, Italy, Spain, etc.

<comment><USER9> Sounds more like that's a side effect of globalization. When other countries can provide more labor for less cost, it leads to a race to the bottom to see what country can provide the lowest wages, thus decreasing the quality of life for workers.

I understand that return on investment is important, but corporate profits are overall higher than they have ever been before. When is enough enough? When should we start to again prioritize the quality of life of our workers?

edit: To those downvoting me, could you please explain the flaw in my logic? I don't see what's wrong or inaccurate with either of my comments.

<comment><USER11> When is enough enough? No-one gets to say. For better or for worse, a race to the bottom is a coordination problem where the incentive is always to be the defecting party. This means that however well-intentioned you are, global capitalism marches on without you, your choice is to jump on the bandwagon or become irrelevant. Politics doesn't matter much, it can only stall the inevitable, usually at great cost.

<comment><USER9> > When is enough enough? No-one gets to say.

Yet we do get to say. A big cause of the political instability in the US is due to increasing inequality and a declining quality of life for much of the country. If such economic forces cause protectionist legislation to be passed, isn't that the people getting a say?

Also, the idea that you must jump on the global capitalist bandwagon to remain relevant is odd to me. Is being an economic powerhouse the only factor in a country's relevance?

<comment><USER12> What political instability in the US? Please define what you mean by instability, the US has been the most stable national government since it was founded, with a big exception of the Civil War of course. Even then, compare it to the governments of any continental European or Asian or African nation that isn't part of the British Commonwealth, and we have had a stable democracy while basically every single non-commonwealth government has gone through collapse, been reformed, and collapsed again in the meantime.

I mean it's easy to say 'inequality' as some kind of Marxist trump card that you think automatically ends all possible debate, but meanwhile things in the US are fine. Fine != Perfect, of course, but it is yet to be demonstrated that you can have a socialist/market capitalist welfare state that functions outside of the Nordic countries. Every other attempt at it has been a complete disaster.

<comment><USER9> > What political instability in the US?

The election of Trump and the near-election of Sanders.

They are signs that a huge chunk of the population is discontent with our political system and with the direction of the country. A history of collapse isn't required for there to be instability in a nation.

> it is yet to be demonstrated that you can have a socialist/market capitalist > welfare state that functions outside of the Nordic countries.

I didn't say that's what we should do to solve the problem, merely stated the fact that worker protection laws are important, then questioned when return on investment should supersede quality of life. A socialist welfare state wasn't involved in the 1930's when inequality declined in the US, which is proof that things can change without such systems.

I worry that if we don't do something about the growing discontent among our lower and lower-middle classes, they'll continue electing populist candidates until someone truly dangerous gets elected, and I feel that correcting the inequalities caused by globalization and the strong dollar would be a good place to start.

<comment><USER12> And we elected Richard Nixon multiple times (governor, vice president, president!).

I suggest you don't get caught up in the hype. The current period is actually extremely placid compared to many in the course of our history. Just because Trump is really dumb, and that people voted for someone really dumb, doesn't make things 'unstable'.

If anything Trump's term so far has been a case study in what a stable system looks like. He can barely implement any policy and has yet to get any legislation passed. In the meantime the government seems to be functioning, checks are being mailed on time and the military is still under civilian control and is 100% loyal.

I mean what sort of scenario do you have in mind (if any) of how this 'instability' would play itself out? Generally the biggest threat to democracy isn't "electing someone that everyone thinks is stupid and has negative charisma, during a peaceful time with few major problems" it's the opposite, someone super charismatic during a time of extreme danger.

I would say that electing Clinton would have been a far greater symptom of something deeply wrong. Not because of her personally, but because it would have been the second time in 12 years that we elected someone who was in the nuclear family of a previous president. Oligarchy destroys democracy, an incompetent leader is just someone we put up with for awhile (and we have had plenty far worse).

I think Trump would have lost by double digits if Biden had run, and he would have lost handily if Bernie had won the primary. It almost goes without saying that a hypothetical Trump vs Obama election would have been a bloodbath. There are probably half a dozen establishment democrats that would have beaten him easily. However, they didn't run because the Clinton machine was actively threatening anyone who didn't get in line for years ahead of the election. THIS is what destroys democracy, the ability of powerful families to perpetuate their power and influence. That Bernie did so well says very little about him, and a lot about how well anyone would do running against Hillary Clinton, a candidate that a sizable majority of people dislike and believe to be a liar. Frankly, Clinton is probably one of the only people in the country that Trump would have won against.

Anyway, the point of all that is to say that Trump didn't win because of discontent or something that made him popular, he won because the Democrats nominated someone who is not electable. Trump was never popular, even on the day he 'won' the election.

</comment></comment></comment></comment></comment></comment></comment></comment></comment></comment><comment><USER13> This is what I always believed unemployment SHOULD BE in America. The amount from unemployment is painfully low for most people who need it, but having been on unemployment a few times, beyond the check, there's very little support.

<comment><USER14> Social protections for the unemployed allow you to disentangle "Should I ruin this person's life" and "Is this person contributing to my business". I understand the reasons why those two got entangled historically, but I've always thought anyone who's really invested in a society with both laissez- faire capitalism and a claim to moral decency should support an extremely generous social safety net.

<comment><USER8> For some people SS in the USA is more generous when I worked for a company that went bust benefits £56 pounds a week ran out after 18 weeks.</comment></comment></comment>


Houston-Dallas high-speed rail construction may begin in late 2019 - <AUTHOR> https://www.chron.com/neighborhood/spring/news/article/Houston-Dallas-high-speed-rail-construction-may-13620560.php <comment><USER2> ATM from DFW to Houston takes about 3-4 hours depending on from where and when your leaving. Flights take 3-4 hours if you count the 2 hour security/boarding process.

I really hope this comes to fruition and would welcome it's expansion to Austin and San Antonio from DFW.</comment>


Show HN: Prodigy Notes – a web app for daily journaling and note taking - <AUTHOR> https://prodigynotes.com

<comment><USER2> I tried the signup and immediately got this page:

___

Oops

Sorry, an error occured.

500 Internal Server Error

___

displayed URL: [https://prodigynotes.com/register](https://prodigynotes.com/register)

using Chrome 43.0.2357.130

and, backnavigating cleared all my entered data.

So, my first feedback would be that your error messages are unhelpful. ;)

BUT, retrying with same signup data told me I was already logged in and gave me a home page. (to get picky, the page says "Welcome Back!" even though it was my first load of it)

<comment><AUTHOR> Sorry about that! Yes, looking at the server logs quite a lot of people are getting database connection errors. My next dev task is to get this optimized.

</comment></comment><comment><AUTHOR> Hi everyone, my name's Tim. I designed and developed Prodigy Notes over the past six months. Prodigy Notes is a web app designed for journaling, but could also be used as a lightweight Evernote or OneNote alternative. There are a lot of options in this space, but the features that I wanted weren't all in one place, so I built Prodigy Notes to scratch my own itch. These features are: prominent word counter, side by side note view, and uncluttered UI. This is my first web app, and I'm putting this out there to get feedback on the usability, design, and technical approach. It's pretty basic now, so I've outlined a roadmap here: [https://prodigynotes.com/blog/product- roadmap](https://prodigynotes.com/blog/product-roadmap)

Thanks for your time!

<comment><USER3> Neat design! I myself have a preference to self-host things...Do you plan on providing an option to self-host?

Also others might be interested in what are the main differences between Prodigy Notes and, say, Simplenote.com ?

Also the site is getting intermittent " 500 Internal Server Error" but that could just be from a bunch of HN traffic.

In any case good luck!

<comment><AUTHOR> Thanks for the feedback!

I plan to open source it down the road, which would give you the option to self host.

Main differences? Right now, UI and functionality wise, not much. Simple Note has a whole slew of native apps and a few years of history going for them. In the future, I plan to tailor my offering to people who are trying to make writing a habit. That means activity calendars like Github for writing progress, with word counts by day for example, in app writing prompts, etc.

It does look like the database is hiccuping right now. I am going to look into optimizing calls over the next few days- I'm a jr. dev and don't get paid to do this, so I'm learning in my spare time. Thanks for bearing with me!

</comment></comment></comment><comment><USER4> Nice work Tim. [shameless plug] it is similar to what I built at devarist.com except that I'm more interested in the daily scratch pad than encouraging a journal, because that was my itch. It's great to see someone else building a similar product though because it means I'm not completely crazy. Good luck with it.</comment>


Show HN: An iOS AR game playable off of t-shirts - <AUTHOR> http://theaugmented.me/

<comment><USER2> Is it actually cheaper to produce videos explaining things than to provide a few screenshots with texts? I don't have flash installed on my browser anymore, too lazy to switch to Chrome just to watch some random video.

<comment><AUTHOR> Sorry, we are in the process of adding new screenshots to the website. View the app on the App Store for a much more detailed description and screenshots of it being used in a variety of situations.

<comment><USER3> > Sorry, we are in the process of adding new screenshots to the website

Sorry, but why would you post to Hacker News, if what you offer is incomplete and you didnt even bother putting couple screenshots of something that may be totally different than anything else most of us have seen for years.

I wasn't as lazy as GP and went to iTunes store to see the screenshots and it looks awesome, but won't vote up this for a reason that you were lazy enough not to put the images on.

I don't understand how people can pull off brilliant ideas that takes weeks or months to build, then they post to HN to use one of not so many occasions to grab an audience, and then they blew it off because they forgot to post a basic content, like photos.

<comment><USER4> I think you're looking at this a bit too seriously.

I mean, they're at WWDC, they want to promote their site so they add it to HN.

Either people complain that there is no video, or they complain that there are no screenshots. Do people really not have enough to do that they complain about everything?

<comment><USER2> It's just that lately all sites seem to go the video only route, which is a shame. And really, why not have both?

It's not about complaining about everything - it's just that I won't care to check out their product. Their loss, not mine.

</comment></comment></comment></comment></comment><comment><USER5> I love things like this, but I really feel like putting it on the back of the shirt is really socially awkward. "Hey can you turn around and not face me for a while so I can play your shirt"

</comment><comment><USER6> I look forward to the day we can play AR games (with server-side enhancements) with either something like Google Glasses or (hopefully) Google Eye Contacts. Once we're hands free and have overlays and server support, it opens up whole new avenues.

At first, it could be simple enhancements/reimplementations of existing games. Like handball with different colored circles that appear on the wall that you have to hit in the right order.

Then it could be FPSes, where you have a virtual arsenal of weapons, and once you get fragged, you have to return to a predetermined location (flagged using GPS coords) to "respawn."

Third, we could have full-fledged AR RPGs - think real-world WoW where your surroundings actually look like Azeroth, and you fight mobs alongside your friends, go into instances that look like the ones in the game, etc.

Exciting.

</comment><comment><USER7> This does not seem like a lot of fun for the person wearing the t-shirt.

<comment><AUTHOR> Yeah, we are at WWDC at the moment wearing the t-shirts to promote the game and I have mostly been the back people have been playing off. It is a bit odd just standing there but I think people can have 'fun' by using it as a way to impress and shock people. The t-shirt draws a lot of attention and so it's great for people who like that kind of thing.

Also the game just needs the marker that is on the website and so it can be played off of laptops, iOS devices and even printed out.

<comment><USER7> Yeah, I would have focused more on people playing (for example) in the subway in front of a big banner for the game.

</comment></comment></comment><comment><USER8> They should make something where both players battle with games on each other's t-shirts!

<comment><USER9> a sticker (i suppose peelable ideally) on the back of each other's device could give some interesting options..

i also think they are missing a trick not having the pattern on the front and using the then known position of the wearer's head in some way..

perhaps the two could be combined into some kind of shield/shooter duel, in which case you could still flog the tshirts as part of the game.</comment></comment>