(But that is on a national level: in the West, in comparison, housing growth hasn't been sufficient to house the new households formed at any time in the last 70 years and so the problems run deeper.)
Normally, cheap housing is housing that was expensive housing 30-100 years ago. Think of all of the post-war apartments in NYC, or the Boston multi-family houses built around the previous turn of the century.
Since many cities currently lack the recently-aging housing that would normally be filtering down market right now, the elasticity at the top is affecting housing too new for developers to be out of debt on, and thus we are unlikely to see it translate into lower prices on the low end until another 20-25 years pass and we get out of this housing doldrum.
(Not the West, though. Sorry San Francisco: you just have to build more places where people can live.)
> Since many cities currently lack the recently-aging housing that would normally be filtering down market right now
Huh.... in the UK house prices go up for older houses. You'd pay a premium to get an interwar house, or a 19th century house. Do people not like old houses in the US? They're usually better built, with more character, built on more land, in my experience.
Old houses in the US come with a lot of costs. They're usually poorly insulated, need to be brought up to code when renovations are performed, can have electrical and plumbing systems that need to be replaced in their entirety, and sometimes are just hard to insure in general (insurers can cancel your homeowners policy on any home in Florida over 40 years old at their discretion when your policy comes up for renewal). House has lead and asbestos? Remediation can be costly depending on your jurisdiction's requirements. This is less of a concern in highly desirable areas, as well to do buyers will buy for the land alone, demolish the property, and build new.
Disclosure: I renovate homes as a hobby, and occasionally demo those beyond repair. Most recent project was an older duplex in Naperville, IL torn down to replace with a modern three flat.
'Old' houses in the US are different than old houses in the UK. Old in the US usually means 1930s/40s/50s and the majority of that housing stock was poorly constructed leading to the problems that @toomuchtodo alluded to. In the few places where we truly have old houses (19th century) - the North East and central parts of some cities - they do, usually, command a premium.
Usually when I've seen 19th century homes for sale at premium prices, it's because they're of a desirable architecture in old-money neighborhoods and have been well maintained for their entire existence. I think it might be a bit of a survivorship bias.
Look at the HVAC system (typically boilers/hydronics of various vintages). If they're in good shape, it's likely the rest of the home as been similarly kept up, as that's one of the more expensive systems in such a home to keep in working order.
I think that's mainly only known to savvy people, other that perhaps general stuff about energy efficiency, which can go both ways in terms of gas versus electric or whatever. All things being equal in terms of cost, the average person still prefers the modern architecture of big kitchens, big windows, master bathrooms, walk-in closets, etc. It helps to sell your house if you add these things.
Prices for older homes in more historic cities are high, even in the USA. But that's because commuting in Boston or DC is a fucking nightmare and most new development is occurring pretty far from the city centers. (though, not nearly to the degree of London)
When you get to places like Nashville, it's still possible to build a new home 15 minutes from downtown. Plus, fly-over cities tend to have satellite "office districts"* in the suburbs. So there's really no benefit to dealing with an older house, so, unless they are particularly charming, old homes come at relative discounts to new ones.
* Basically a town, usually off of a major highway, that is made up entirely of large office complexes designed for commuting by car from nearby suburbia.
It is the case everywhere in the UK. Old mill towns in the North, especially the Peak District, have housing made from granite, a lot of these were built during the height of the industrial revolution, they're absolute tanks compared to modern flat packs.
Erm, the characteristic stone in the Peak District is sandstone, but yes. My last house was built in the 1760s and I describe it as the heaviest object I have ever owned.
- Modern homes tend to have large kitchens, bathrooms, and bedrooms, and open common areas. People may prefer this over the misc-rooms approach that's more common in older places.
- Old homes in the US may not have 3-pronged outlets
- Old homes may have faucets that don't stick out far enough to get your hands under. Ones in the UK may have separate faucets for hot and cold. (Is the intent to fill the basin? Rapidly move your hands between the two?) You're more likely to have touchy shower temp controls
tldw; Older homes in the UK had a water storage tank in the roof space that fed the water heating tank. This couldn't be classified as drinking water so wasn't allowed to be combined with the safe mains water that fed the cold tap. These days modern houses mostly use combi-boilers with no storage tank, so mostly both hot and cold are drinkable and it's not an issue. But preferences still lean towards the separate taps.
That may be a perk of having had an aristocratic ruling class, the first industrial revolution, and global empire (not being sarcastic- I'm a big Hidden Houses of Wales fan, would love to renovate an old castle). The UK was historically wealthy and has amazing old houses. In the US every decade has had significantly better housing stock with increasing standards of living, so its much less appealing to get an older house in 95% of the country. Especially anything 40s - 70s you get smallish rooms, low ceilings and questionable "vintage" building practices like I'm dealing with now (aluminum wiring, poor insulation, etc).
Non-American homes are all well built estates that last for a thousand years and need no improvements. Asia and Africa are full of particularly well built estates.
Seriously...All homes must be maintained or they will deteriorate.
America has ready access to a building material that many of these places don't: softwood. Softwood really just does not cut it if you're trying to build something that lasts hundreds to thousands of years. So they don't build for that.
Yeah and higher ceilings, bigger windows, nice wooden floors, ornate decorations etc. Turn of the century apartments are the nicest and most expensive.
I've heard that usually the price of the land goes up faster than the price of the building goes down.
But I guess if the building is unique or listed or has high enough build quality that it won't be knocked down in the foreseeable future, then maybe the building's price goes up to.
You've heard correct because the building is depreciating/deteriorating about as fast as it's nominal $ value is inflating, so it's about a wash and the nominal $ stays flat long term. But the land is scarce and appreciates along with inflation AND productive use of housing. (peoples' same inflation-adjusted consumption of housing ends up using less and less land, like condos, and so the land appreciates even faster than inflation until population growth stalls.)
Most older properties in the UK have walls made of solid stone - which is pretty resilient in a fire.
Also, at least where I live, it hardly ever gets above 25C and if your house has thick solid stone walls the inside doesn't get too warm so no real need for AC either.
Edit: I'm 55 - I've never lived in a property that wasn't at least 100 years old and some were closer to 300 years old.
Edit: I would agree that heating in some older properties can be a challenge, but my parents told my that having to chip ice out of the bath before getting washed was character building.... ;-)
If the house even still exists and is in a desirable part of town in a desirable city, then yes it will certainly commend a premium. Though often as much for its location as for any other reason.
But consider also that in 1900, the population of the US was less than a quarter of what it is now, and also that the number of people per household is much less. Also, a lot (probably most) houses that existed in 1900 don't even exist any more. So in reality there are relatively few houses that old that are still available today.
Insufficient housing creates competition among workers and they do more work for less pay, as nobody wants to be an outsider. The number of building permits is set by city councils and those listen to the capital as the latter can choose where to create jobs.
Have you ever seen people talk about how the 13th Amendment to the US Constitution outlaws slavery "except as a punishment for crime whereof the party shall have been duly convicted", leading to the modern prison-industrial complex that overwhelmingly targets black Americans with arrests for petty crimes and traps them in The System? https://sites.lib.jmu.edu/civic/2020/09/17/slaves-of-the-sta...
The ECOA makes it illegal for lenders to discriminate for home mortgage loans, which would lead to reduced racial segregation (following the Fair Housing Act of 1968), reduced discrimination against unmarried/divorced women, and many other nice things. The exception is that discrimination is still totally legal if the person just can't afford the home. As Atari once told me, Do The Math: https://fred.stlouisfed.org/series/OEHRENWBSHNO
> The exception is that discrimination is still totally legal if the person just can't afford the home.
It's also important to remember how this applies to school districts. If you exclude the poor from your neighborhood, you also exclude them from your school district. (This explains part of the otherwise unexpected opposition to school vouchers by college-educated affluent Democrats and the support for them by rural Republicans in bad school districts, when the vouchers would allow students to escape bad school districts.)
Interestingly the steep curve on the graph is caused in large part by misguided policies claimed to increase home ownership (which is not really possible without increasing the housing supply). You can clearly see the "give mortgages to everybody regardless of whether they can afford it" policies leading up to the housing crisis, followed by the housing crisis, followed by more than a decade of near-zero interest rates inflating housing costs.
It looks like we had completely reinflated the housing bubble by 2016 and have only gone up from there, so that's... not ideal.
Though artificial housing scarcity is still a separate and real problem that compounds with this.
What's super disgusting is charging mothers who can't afford to live in your district but still wanted to give their child the best education she could, so she used her dad's address...
> This explains part of the otherwise unexpected opposition to school vouchers by college-educated affluent Democrats and the support for them by rural Republicans in bad school districts, when the vouchers would allow students to escape bad school districts.
I'm aware of wealthy families wanting the voucher to throw toward private schools (they were never going to send their kids to public schools regardless). Wealthy families are of both political leanings.
Then there are the conservatives that dislike public schools because the teachers are in a union, or they believe teachers are liberals, or that they indoctrinate their kids into anit-Capitlist thinking, etc....
Really unfamiliar with the scenarios you paint.
> You can clearly see the "give mortgages to everybody regardless of whether they can afford it" policies
Or was it the de-leveraging of the banks, credit default swaps, derivatives and other shady practices by Wall Street?
> I'm aware of wealthy families wanting the voucher to throw toward private schools (they were never going to send their kids to public schools regardless).
The people rich enough to pay for private school tuition without any government subsidy have their own neighborhoods with their own school districts, where everyone else in the district is also that rich and sends their kids to private school and the property taxes are correspondingly less or spent on other things. They've already solved it for themselves.
The people who want school vouchers are the people who want to get into those schools but don't have the money to pay for it after the government takes it from them in property taxes and refuses to let them use it for anything other than sending their kids to a bad school district.
> Then there are the conservatives that dislike public schools because the teachers are in a union, or they believe teachers are liberals, or that they indoctrinate their kids into anit-Capitlist thinking, etc....
These are just specific examples of things that cause a school district to be low quality, e.g. when unions prevent bad teachers from being fired, and cause parents to want a way out of the broken system for their kids.
> Or was it the de-leveraging of the banks, credit default swaps, derivatives and other shady practices by Wall Street?
Recall that all of those things were justified on the basis of "increasing liquidity" etc., i.e. making it easier to own a home, and that their consequence was "give mortgages to everybody regardless of whether they can afford it" because if the bank was going to sell the mortgage to someone else as a derivative or use a CDS then they didn't care if the borrower could pay it back.
That raises a question. How do other impoverished groups escape the poverty trap more quickly? Historically Chinese and other immigrants's needs were served by their own official and unofficial institutions. What can be done to keep dollars within a community to grow wealth within?
I feel like it goes way beyond "impoverished" when the oppression and exploitation of free labor from a particular group is woven into hundreds of years of cultural DNA of the country, right from the very beginning written into the founding documents of South Carolina in the 1660s: https://avalon.law.yale.edu/17th_century/nc05.asp (section 110)
There are so many intersecting social issues too, like America's experiment with alcohol prohibition in the 1920s and anti-prostitution laws that to this day are endangering women, enabling trafficking, and being used as justification for ever-increasing surveillance. You can guess which types of "open minded" businesses back in the day tended to host jazz music and be more welcoming to blacks. Most people in San Francisco, for example, know of the Fillmore District but probably not of Terrific Street: https://en.wikipedia.org/wiki/Terrific_Street#Demise
I can't speak to cultural DNA. But I guess we could test it by looking at kids who at a young age moved to a different country and whether that cultural DNA sticks.
As I mentioned elsewhere, I think the media and entertainment have a hand in this and the establishment does not care --they want cheap labor. So on the one hand it's Fast Times at Ridgemont High, on the other we big tech and others want American kids to be dedicated to study like Chinese or Indian kids.
Movies and Media pretty much indoctrinate kids to be carefree and do what you want without consequences. (If media had no influence on people, people would not call for diversity in role models, etc)
> I think the media and entertainment have a hand in this and the establishment does not care
I agree, but I think the establishment does care quite a lot. That's what I was getting at when describing my personal view of the "establishment" as a kind of conscious entity, not exactly what I would call human, but conscious all the same. Like a corporation where harmful decisions end up being no particular individual's "fault" because every individual contributed but a sliver of the final thoughtform, individuals doing their best but who exist in a space where the scope of possibility is already narrowed for them in a way they might not even notice.
That's also why the US media industry and cultural exports are so important here. My personal view of a country is descriptive rather than prescriptive, that borders are implicit based on the speed that ideas can travel, and the US media-exported culture was the dominant one when global instant communication became possible. Makes me think about the esoteric outcomes of the copyright wars too. The big bad RIAA/MPAA get to be the boogeyman and absorb all of my nerd-hate-energy, but the outcome ensures that only current-generation media with establishment-approved themes makes it to our eyes and our ears.
That is a great question and one that the book speaks about. Some points to consider without going too deep:
- Italians and other European communities also faced with xenophobia and racism. Italians even founded 'the bank of Italy' (which is now BofA) because there were lack of institutions who financed and provided debt to them. Some laws have deliberately pushed to integrate white europeans to 'white american' society.
- Blacks had and still have to face systemic ('redlining' districts, 'G.I Bill, 'Civil Rights', etc) and unofficial racism. As a result, Black-owned banks typically face larger cost of debt, have larger liquidity requirements (small deposits and shorter withdraw periods) and more strict mortgage rules. We all know what happened.
PS: there is still a lot of poverty traps for other immigrants and minority groups. We are still far away from what needs to be done
Also of note are the Landsmanschaft and Jewish mutual aid societies, especially prevalent in early 20th century NYC. Contrary to stereotype many Jewish immigrants came here poor and Talmud encourages (requires?) an observant Jew who is able to lend money interest-free to help others get on their feet.
Not living in an environment where everything can be taken away from you through one bad interaction with say, a policeman helps. Having a stable family with positive role models, preferably one not torn apart by brushes with the justice system helps, too.
These kinds of problems get inherited from generation to generation, even if (a damn big if) the current generation were not directly subjected to any of the original racist cases thereof.
I think unfortunately for multi-generational Americans there is a weird stigma when you come from certain backgrounds --some people escape them, but not most. Immigrants don't usually have this stigma and burden. They come for the opportunity which they believe comes with putting in hours or work and study. If you're second generation and greater, you assume many Americanisms like you're entitled to American things without the hard work. Immigrants are willing to sacrifice a generation so that the next might succeed. Quite a few of my HS cohort didn't have it in them to put in hard work. They wanted to hang out, play, skip school, go to the mall, smoke weed, get beer, etc. Kids of recent immigrants were not like that, by and large.
You hit a note with me about your American upbringing because I've had the same thoughts about mine but hadn't seen it hit it on the head like you have. American youth culture doesn't really value hard work and intellect. I know media like movies has a hand in this portrayal but I'm not sure it's really intentional like you allude to. I still wonder what it really is that some of us make it out into well paying careers while most of my HS cohort also mostly coasts on lackluster degrees and jobs. Race hasn't been any common thread in outcomes I've seen intra-high school, whereas the biggest differences seem to occur between high schools.
> American youth culture doesn't really value hard work and intellect.
They would be foolish to value those things when they can look around the world at large and see how success vs failure is pretty much some combination of luck and network/nepotism.
Kind of... 1st gen Americans retain the drive from their parents’ cultures and do better. But rivers flow downhill.
While I’m not advocating the Chinese entrance exam system, we’re the polar opposite where being lazy is cool. Look at all the youth drifting to LA dreaming of making it big. Some of that is going to YouTube/Instagram type platforms but it’s still a one in a million shot at glamorous success rather than steadfast hard work for a steady career (we do have physicians and lawyers and MBAs who resemble the steadfast attitude but it’s a small slice of society) we’re just not good at instilling this culture in our youth as well as other cultures do.
If cheap housing is expensive housing built 30-100 years ago, we should have had decades and decades of delapidating housing stock left to go before hitting a shortage.
Not to mention your example of housing in Boston built at the turn of the 20th century. A laissez faire policy that makes the poor wait 120 years for housing is hardly any policy at all.
Later on, in 1978, most of the city was down-zoned, and in the EIR (Environmental Impact Report) written at the time, it was clearly predicted that this would result in a supply shortage and increased prices. Unless the city made a point to increase density and development in the industrial parts of the city. That didn't really happy to the scale the EIR said was needed.
And many cities did, which is why the trend has been getting slowly worse.
I didn't talk about any "laissez faire" policy, and as far as I know no city in the US is pursuing a laissez faire policy. I also don't know why you think it is bad to have housing stock that lasts; having lived in a number of those turn of the century homes, they were better and cheaper than the "affordable" new apartment options. They were well-built luxury homes that are comfortable to live in, but didn't have the modern status symbols the new luxury apartments had. It isn't a universal thing, either; it was specifically because the luxury housing from the time was _nice_. I looked at cheap apartments in 1970s cement bunkers and always went back to living in a beautiful Victorian with vaulted ceilings, even if they were dustier & colder.
Affordable housing will always compromise on something, and personally I preferred finding roommates & buying space heaters to living in a shoebox.
As someone below noted, these dynamics vary dramatically by local. California, much less San Francisco, is a whole different kettle of fish. But because we stopped building housing for a while, we are at best going to face a period of catch-up, no matter what we do.
>I know no city in the US is pursuing a laissez faire policy
Well of course. The people who want laissez faire anything don't wind up living in the cities that have these problems. they self select to live in rural areas and the occasional rust belt dump where there is either no regulation or no enforcement.
The people who don't recoil at the thought of their property rights being violated wind up living in Boston, SF and their surrounding suburbs and vote for more of the same.
Starting around 1975, housing supply stopped keeping up with the growth of housing demand. It picked back up fifteen years later, around 1990: https://www.brookings.edu/research/the-goldilocks-problem-of...
(But that is on a national level: in the West, in comparison, housing growth hasn't been sufficient to house the new households formed at any time in the last 70 years and so the problems run deeper.)
Normally, cheap housing is housing that was expensive housing 30-100 years ago. Think of all of the post-war apartments in NYC, or the Boston multi-family houses built around the previous turn of the century.
Since many cities currently lack the recently-aging housing that would normally be filtering down market right now, the elasticity at the top is affecting housing too new for developers to be out of debt on, and thus we are unlikely to see it translate into lower prices on the low end until another 20-25 years pass and we get out of this housing doldrum.
(Not the West, though. Sorry San Francisco: you just have to build more places where people can live.)