Comments on: This isn't gentrification, it's another phenomenon entirely

This isn't gentrification, it's another phenomenon entirely

acb — Thu, 25 May 2017 04:51:09 -0800

Renting in London in 2017 is grim. While the city is in the middle of a record construction boom, almost all of that is luxury apartments for overseas investors. "Golden postcodes" such as Kensington, Highgate and Notting Hill are the preserve of the international "alpha elite", displacing the local wealthy, and setting off a chain reaction. As rents go up, people on above-average incomes find themselves in "middle-class poverty", having to move repeatedly and to make do with smaller spaces. As there is no regulation, any house that is not a hazard to health is legal, and it makes economic sense for landlords to evict tenants rather than carrying out repairs. Meanwhile, in outer boroughs, poor workers live in bunks in cramped, shared rooms in houses and sheds, preyed on by chains of "rent to rent" entrepreneurs sometimes shading into human trafficking rings.

The effects of this are being felt, both economically and personally. Employers are having a hard time filling or retaining professional jobs, let alone nurses, teachers and cleaners. Meanwhile, housing precarity, substandard accommodation and the dislocation of repeated moving are taking a toll on mental health.

By: sammyo

sammyo — Thu, 25 May 2017 05:11:31 -0800

Bubble effect. What do we know about the long term advantage of a massive bubble on the local economy?

By: empath

empath — Thu, 25 May 2017 05:14:51 -0800

Just browsing around a bit, flats in those neighborhoods seem to roughly be where we are in D.C. in terms of price. I was looking at buying a house in northern Virginia, and half a million dollars gets you a 3 bedroom townhouse 40 minutes outside of D.C, or like a two bedroom condo inside the beltway.

By: jadepearl

jadepearl — Thu, 25 May 2017 05:19:33 -0800

Hmmm... you know the rental prices listed on U.K. Sites are weekly rates? It was a shocker to me once I recalculated the prices.

By: pharm

pharm — Thu, 25 May 2017 05:24:41 -0800

London ones are weekly. Outside London monthly rates are the norm.

By: ellieBOA

ellieBOA — Thu, 25 May 2017 05:26:55 -0800

This was such a depressing read. I daydream about moving back to London and then remember this. Never stops surprising people here when I say one of the reasons I like Paris is the fact that it's cheaper than London, since as a tourist they are roughly equivalent (another reason is Paris is teeny compared to London!).

By: rough ashlar

rough ashlar — Thu, 25 May 2017 05:27:51 -0800

Don't worry folks! The market will provide. Ya see, when companies can't find labor because the labor has been priced out of the market by a lack of proximity to the place of work the companies will just say "and that is why we HAD to use robots for that job." See how the market works?

By: Grangousier

Grangousier — Thu, 25 May 2017 05:37:55 -0800

It's interesting to see that [Southwark] Councillor Mark Williams is allowed to get away with complaining "that the council found a two-bedroom flat on the Aylesbury estate with 20 occupants, who were being bussed down to Bromley, 40 minutes away, every day to work in a sweatshop", without it being pointed out that the way Southwark Council plan to deal with the Aylesbury Estate (which is structurally fine, or at least the apartments in it that I've seen are) is by selling it off to developers so it can be knocked down to build more luxury apartments. The promises by the developers of "Affordable Housing" - a phrase which is even more meaningless in London than it is everywhere else- will evaporate as they did a few years ago over the destruction of the nearby Heygate estate. (tldr - Councillor Mark Williams is not necessarily one of the good guys.)

By: jadepearl

jadepearl — Thu, 25 May 2017 05:39:32 -0800

Pharm, good to know about London being weekly and elsewhere monthly. I was freaked out my London rent was more than two house mortgages. It was telling that the head of my child's nursery school told me her daughter was leaving the UK for Australia just for opportunity and property market.

By: schadenfrau

schadenfrau — Thu, 25 May 2017 05:39:48 -0800

WEEKLY? Uh this...this is actually dystopian. Like it has arrived.

By: acb

acb — Thu, 25 May 2017 05:47:30 -0800

It was telling that the head of my child's nursery school told me her daughter was leaving the UK for Australia just for opportunity and property market. Hope that she doesn't have her heart set on Sydney or Melbourne then, as they're a step behind London, if that.

By: knapah

knapah — Thu, 25 May 2017 05:57:59 -0800

Roughly £1100-1200pcm for a one bed flat in my area of north east London.

By: palomar

palomar — Thu, 25 May 2017 06:10:04 -0800

Oh boy... I hear through the grapevine that some former friends are selling their house here in the Seattle area and moving to London. I thought they were smart people but I guess their "this country is ruined and we must flee" line of thinking has overtaken them... as bad as the housing situation is out here in the Pacific NW, London is far worse, and this cockamamie plan of theirs actually makes me worry about their mental health after reading this.

By: inflatablekiwi

inflatablekiwi — Thu, 25 May 2017 06:13:05 -0800

WEEKLY? For what it's worth, a lot of cities/countries around the world have historically expressed rent weekly rather than monthly (which seems to be the norm in the US). It doesn't necessarily mean the rent is actually collected weekly - most places I've rented on a weekly rate have been actually paid on a bi-weekly or four-weekly basis, which actually works out if you get paid bi-weekly - and can make budgeting easier (no "weird month where I get paid two days after rent is due") That said (SF Bay Area resident here) I'd agree rents feel like a dystopian reality here ....as I'm sure it does in all the cities I frequently see these sorts of stories about (Vancouver, Sydney, Auckland, London, etc)

By: droplet

droplet — Thu, 25 May 2017 06:15:12 -0800

300 new luxury rental towers going up? Who are all these people with so much money? There are only so many fossil fuel energy barons, party apparatchiks on the take, and gangsters, or am I wrong and I've chosen the wrong career? Is this relatively small cadre of people just buying up more and more properties? I'm gobsmacked that there are enough people with the kind of dosh to price everyone else out of London (and NYC, SF, etc.)

By: tobascodagama

tobascodagama — Thu, 25 May 2017 06:20:08 -0800

That said (SF Bay Area resident here) I'd agree rents feel like a dystopian reality here ....as I'm sure it does in all the cities I frequently see these sorts of stories about (Vancouver, Sydney, Auckland, London, etc) Anywhere with a strong market ideology that's even remotely desirable to live in is going to see this effect. I doubt luxury condos cost much more to build than government-subsidised affordable housing, but hot damn can you extract a lot more rent from them. It's downright irresponsible for real estate developers to build anything else, from a capitalist perspective. So they don't. Is this relatively small cadre of people just buying up more and more properties? That is my understanding of the situation, yeah. Many of the barons and gangsters have kids, as well, and many of the apartments are being purchased for those kids.

By: acb

acb — Thu, 25 May 2017 06:20:36 -0800

Chances are many of them will never be lived in; some will be used as short-term pad when the owner's trophy mistress wants a few days of luxury shopping in London (and at a certain level of wealth, owning empty apartments in the centres of places one might visit is the equivalent of having an AirBnb account); others will be "bubble-wrapped" and left to appreciate in value, their pristine condition unmolested by dirty human bodies. Alex Proud (who was the Daily Torygraph's Charlie Brooker equivalent) once referred to London properties as "Bitcoins for oligarchs".

By: The Card Cheat

The Card Cheat — Thu, 25 May 2017 06:21:10 -0800

It's like looking into Toronto's future. I mean, it's also Toronto's present, but I guess London has had a bit of a head start.

By: Grangousier

Grangousier — Thu, 25 May 2017 06:23:42 -0800

By: grumpybear69

grumpybear69 — Thu, 25 May 2017 06:28:25 -0800

Certain things should be off-limits to institutional speculation: housing, health care, food, education. It is easy to extract wealth on a large scale from those sectors, but it is not right.

By: The Whelk

The Whelk — Thu, 25 May 2017 06:29:34 -0800

Who are all these people with so much money? There are only so many fossil fuel energy barons, party apparatchiks on the take, and gangsters, or am I wrong and I've chosen the wrong career? Is this relatively small cadre of people just buying up more and more properties? Chances are many of them will never be lived in; some will be used as short-term pad when the owner's trophy mistress wants a few days of luxury shopping in London (and at a certain level of wealth, owning empty apartments in the centres of places one might visit is the equivalent of having an AirBnb account); others will be "bubble-wrapped" and left to appreciate in value, their pristine condition unmolested by dirty human bodies. So considering it's in all of the aforementioned owners' best interest to keep the bubble going, is there any reason to suspect the bubble will ever burst? Like, short of turning London into an uninhabited it's full of robots? Or as mentioned with Bitcoin, someone finally blinks and billions of dollars vanish overnight? I mena I don't think anything short of actively, hostily occupying the empty towers will work, and then the May goverment will just murder them. (I mena you could impose legislation and law to prevent this sort of thing from happening but let's be realistic )

By: grumpybear69

grumpybear69 — Thu, 25 May 2017 06:41:34 -0800

Re: food, I mean staple crops, milk, water, etc. Not cupcakes. I used to work for a huge institutional money manager and had the chance to grill the head of AsiaPac about our role in the rice spike of 2008. His response, which could be summed up as "not our problem, it's a free market" gave me incontrovertible first-hand evidence that the people with the $$ really don't give a shit about the impact of their machinations. If there were a way to outlaw that kind of investment I'd be all for it.

By: The Card Cheat

The Card Cheat — Thu, 25 May 2017 06:42:17 -0800

I've also read elsewhere that within my lifetime (I'm 43), real estate has become or is perceived to have become the best (or only) way for the middle class to effectively invest their money. So everyone has the vast bulk of their money tied up in real estate, and they're trying to keep up with the millionaire class, so everyone has a vested interest in real estate prices going up and up and up, forever.

By: enn

enn — Thu, 25 May 2017 06:53:54 -0800

Is there anywhere that renting isn't grim in 2017?

By: howfar

howfar — Thu, 25 May 2017 07:05:25 -0800

Employers are having a hard time filling or retaining professional jobs, let alone nurses, teachers and cleaners. I think this has got a bit garbled in the paraphrasing, but maybe we really do live in a world where nurses and teachers are not regarded as professionals anymore, on account of generally making less than £40k a year...

By: Squeak Attack

Squeak Attack — Thu, 25 May 2017 07:11:31 -0800

Is there anywhere that renting isn't grim in 2017? Well, it's okay here in Tucson, but we have other problems (sprawl, poor public transportation, no jobs, property crime and who knows what happens when the water dries up!)

By: acb

acb — Thu, 25 May 2017 07:13:55 -0800

Teaching got proletarianised sometime around the Reagan/Thatcher era because of them being unionised and sort of left-wing. Thus, in the media and public perception, the image of teachers is subliminally classified into an undifferentiated mass of labour, like coal miners or bus drivers, rather than ranks of high-value professionals, like barristers or surgeons, and the subtext in the tabloids is that they're a radicalised, bolshy rabble who demand unearned pay rises in between filling your children's heads with fashionable politically-correct nonsense.

By: geegollygosh

geegollygosh — Thu, 25 May 2017 07:17:31 -0800

"Employers are having a hard time filling or retaining professional jobs, let alone nurses, teachers and cleaners." I think this has got a bit garbled in the paraphrasing, but maybe we really do live in a world where nurses and teachers are not regarded as professionals anymore, on account of generally making less than £40k a year... I thought about dropping that sentence into the ' teaching gig economy' thread.

By: ROU_Xenophobe

ROU_Xenophobe — Thu, 25 May 2017 07:28:44 -0800

Is there anywhere that renting isn't grim in 2017? Around here (Buffalo NY) you could get into a sort of crappy but kinda okay 2BR apartment, like for undergrads, starting at maybe $700/month? ...which is still sort of a fool's game around here because that much per month would probably also buy you a 3 bedroom free-standing house in a decent suburban area. Finding a job to pay for it is harder.

By: lagomorphius

lagomorphius — Thu, 25 May 2017 07:31:30 -0800

One could not wish for richer irony than the Pottery Barn ads scattered throughout the other pictures in that story.

By: eviemath

eviemath — Thu, 25 May 2017 07:33:15 -0800

That's the thing - I honestly don't see any way out of this other than crashing the luxury apartment market. And what happens then? Is there actually a precedent for this? I realise there are property booms and busts throughout history (and London's history is specifically built out of them), but am genuinely curious to know whether anything on this scale has happened before. In New York City, they had a rent strike in 1907-08, the Great Rent Wars in the early 1920's, and more rent strikes in 1963-64, all of which helped shape the current rent control regime to various degrees or with various levels of success. The NYC rent strikes affects pushes for rent control in other big cities, as well, on top of similar tenant activism.(*) Currently, there's a big rent strike going on in the Parkdale neighborhood of Toronto.(**) Short answer: the way out is organized tenant activism, supported by broader community. This is certainly not the first time the world has dealt with the ills of predatory capitalism on this scale - the US seems to be surpassing Great Depression levels of economic inequality and regressing back to the 1880s, but people got together and forced the system to change then, and we can do it again. We have it slightly easier because there are precedents, and we can plan better for more complete change so that we don't have to keep fighting the same fights over and over again. (* There are a variety of ways to set up rent control, some more effective and some less helpful. I'd have to poke around to find the relevant literature, but this is a thing that has been studied. An entirely different economic structure that doesn't treat people's homes as capital that can be used as an investment would be a more permanent solution, of course.) (** By the way, you can follow the rent strike, contribute to their rent strike fund, or take other helpful action through their web site.)

By: eviemath

eviemath — Thu, 25 May 2017 07:35:17 -0800

I should note, there has been similar tenant activism in recent years in London, as well. I don't have relevant links readily on hand, but supporting such groups politically, socially, and financially would certainly help.

By: JanetLand

JanetLand — Thu, 25 May 2017 07:43:51 -0800

Is there anywhere that renting isn't grim in 2017? Around here (Buffalo NY) you could get into a sort of crappy but kinda okay 2BR apartment, like for undergrads, starting at maybe $700/month? ...which is still sort of a fool's game around here because that much per month would probably also buy you a 3 bedroom free-standing house in a decent suburban area. Finding a job to pay for it is harder. Exact same situation where I live, Central Maine. I couldn't rent anything comfortable or safe with the amount I pay for my monthly mortgage. Wasn't like that 10-12 years ago.

By: tel3path

tel3path — Thu, 25 May 2017 07:44:11 -0800

The way to handle it is to tax land ownership based on the unimproved value of the land, gradually replacing taxes on production (such as income tax) with taxes on land ownership. This solution is simple and has been shown to work as expected to the extent it has been implemented. Winston Churchill intended to introduce it after the War, but didn't get the chance to. Although it's a simple solution, the problem is that no-one wants it because it requires both thinking in a new way, and believing that the problem can be solved. At present, land in London is being bought up by speculators many of whom will hold it out of use, while it appreciates in value because of the economic activity of people around it (such as the labourers on the Aylesbury Estate). Taxing land ownership instead of production, and gradually replacing one with the other, would make it unrewarding to hold land out of use in this way. At present, land speculation is the main driver of the economy and the cause of all the booms and busts. Rent is a tax on production for which producers receive no benefit. Rent affects not only residents, of course, but businesses. It adds costs to production every step of the way. I knew the bust was coming in 2007-8, and in fact it happened sooner than I expected, but it was absolutely predictable given the national obsession with property property property (let alone the activities of foreign speculators). And yes, it is absolutely plausible that land speculation could choke London out of existence. It is already happening. But you mustn't underestimate the depths of poverty to which the standard of living can fall in this country. My own dad was in a workhouse as a child, why shouldn't things be that way again? "Dickensian" conditions will make a comeback unless something changes, and no-one (no-one in power, and none of us proles) actually wants to implement a solution that will work.

By: Kitteh

Kitteh — Thu, 25 May 2017 07:45:15 -0800

I have a lot of friends who live in London and not a one of them make a lot of money. One friend lives with her mum in Hampstead Heath, unable to work because of her CFS (she is also for my money one of the most knowledgeable native Londoners I've ever met); another lives with his dog in Stoke Newington, works at a charity stop, and just moved into a better flat (the previous one had a leaky ceiling and he would never let us come up to see it); the other lives in Southwark, is a librarian, and has trouble finding dependable flatmates because he simply cannot afford a place on his own. These are good people, kind people. But they are all aware that the city they love--and for one, the one they were born and raised in--is rapidly becoming a city for the Rich.

By: orrnyereg

orrnyereg — Thu, 25 May 2017 07:49:45 -0800

By: terretu

terretu — Thu, 25 May 2017 07:54:37 -0800

So everyone has the vast bulk of their money tied up in real estate, and they're trying to keep up with the millionaire class, so everyone has a vested interest in real estate prices going up and up and up, forever. One of the best tweets I've seen (about the upcoming election, specifically, but relevant to this mentality; unfortunately from an account that seems to have been deleted since) described the PR success of Tory/right-wing politics as having created a body politic "so ashamed of not being rich that they will vote as though they were". Housing is extremely broken in this country, and I say that as one of the lucky ones (just about to buy in a market that's consistently rated second- or third-worst in the country after London and the surrounding area) - it feels like clinging to the bottom of a ladder that is being moved upwards and upwards even as I am hanging onto it. And even though it is the only sensible thing for me to do with the money and I realise I'm incredibly fortunate, I still feel sick about all the people being left on the ground as that ladder keeps being pulled up. My mortgage is going to be about £200 a month less than I'm currently paying in private rent, and the house I'm buying is significantly nicer than the house I'm currently renting, and I can only afford it because [good job because huge privilege from fancy education and the conditions that allowed me to get that education] and [got a chunk of inheritance from some unexpected deaths in the family a few years ago]. Without the second of those two, I'd be sunk - I basically had to trade a living parent for a house that isn't horrible and doesn't cost more than a third of what I make each month. So much of the market insanity seems to be what you can persuade people to pay for features you've convinced them are somehow worth that much money - I'm paying £20-30k less for being in a small village in the middle of nowhere with worse public transport (fine as I drive anyway for restricted-mobility reasons) than similar places go for the nearest major town, and for not having a driveway right outside the house. Some friends are paying literally £180k more for a much smaller place that happens to be right near the major railway station in the nearby city where we both work. It's still possible to get somewhere almost-affordable, assuming you're lucky enough to have had your relatives with assets die early and you're already in a position salary-wise that a bank will take a chance on you. But the fact that I'm paying £211k more for my first house than my parents paid for theirs in 1980 is kind of painful to swallow when it just isn't objectively £211k better.

By: acb

acb — Thu, 25 May 2017 08:14:53 -0800

When I was living in Poland last year there was a story in the paper about a British student attending uni in London, who had crunched the numbers and found that it was cheaper for him to live in Gdansk and commute to London rather than attempt living in London. Even with airfare! Also, Barcelona. (The author of the blog post tried doing this a few years later, but only a few times a month. Presumably, eight Ryanair/EasyJet flights a week would take the shine off it.)

By: acb

acb — Thu, 25 May 2017 08:16:04 -0800

One of the best tweets I've seen (about the upcoming election, specifically, but relevant to this mentality; unfortunately from an account that seems to have been deleted since) described the PR success of Tory/right-wing politics as having created a body politic "so ashamed of not being rich that they will vote as though they were". Like John Steinbeck's temporarily embarrassed millionaires, only nobody does embarrassment quite like the English.

By: tel3path

tel3path — Thu, 25 May 2017 08:17:25 -0800

But people don't have a vested interest in seeing real estate prices go up and up and up, forever. They just think they do. For one thing, rent is always a tax on production which means fewer jobs and/or lower wages with which to pay those high rents. High rents ALWAYS go hand in hand with low wages. High rents are the reason why Britain is a low-wage, high cost of living economy. I remember the headlines from 2005-2007 "we're all sitting on a fortune!" newspaper articles gibbering about how "we" are now millionaires because of the value of our houses! This of course is nonsensical, because houses are not a liquid asset. So you'll what - liquidate your million-pound house and...? Buy another house! Do you know how much houses COST in this economy? Yeah, exactly. A friend of mine was obsessed with property property property, partly for psychological reasons (wanted to see herself as aristocracy, but I won't go into that here). Her first house went into negative equity in the early 90s, which was predictable, but she just had to have it. I put it to her that the availability of mortgages in and of itself had demonstrably inflated house prices to enormous proportions and she just said "but are you saying mortgages are bad? mortgages are what let you buy a house!" Oy. In the mid-00s, even she was admitting that the increase in the price of her current house was no good to her, because when she sold it, what would she buy with the money? Another house. And now she needs a bigger house because of her expanding family. Too bad house prices are going up! And in fact rents cannot continue to go up infinitely *because* rent is a drain on the economy. At a certain point, recession or outright depression - worse than current conditions - has to happen and the UK property market will lose its value even to foreign speculators, because it's economic activity around the land that gives it its value. No economic activity, no land value.

By: Segundus

Segundus — Thu, 25 May 2017 08:19:11 -0800

Look, we were told all these rich people would leave if we voted for Brexit and the property market would collapse. A) Why has that not happened, and B) Which side's threat/promise was it, anyway?

By: tel3path

tel3path — Thu, 25 May 2017 08:21:57 -0800

No, we were told the foreign scroungers would leave, and stop taking all our jobs and sponging off our welfare state, if we voted for Brexit. When they said "foreigners" they didn't mean Russian or Saudi land speculators would leave London. People like that are framed as helping the economy by bringing foreign investment. Teresa May had some vague notion of making Britain into an offshore tax haven, somehow, so I imagine that in her muddled head she wants more land speculation, not less.

By: clawsoon

clawsoon — Thu, 25 May 2017 08:26:39 -0800

am genuinely curious to know whether anything on this scale has happened before. Tokyo's Ginza district in 1989? It was mostly a commercial real estate bubble, but with prices at $250,000 - $750,000 per square meter, I'm sure that it wasn't cheap to rent a flat, either.

By: howfar

howfar — Thu, 25 May 2017 08:46:13 -0800

Teaching got proletarianised sometime around the Reagan/Thatcher era because of them being unionised and sort of left-wing. Well, the NUT is sort of left-wing but, having grown up in a family of left-wing teachers (literally everyone in my immediate family and direct ascending lines was/is a teacher with the exception of me and one grandfather, and even I've taught in an international school) I don't think I can really accept the claim that teachers are "proletarianised" in any broad sense. Teachers and (to a much greater extent social workers) are certainly undervalued in public perceptions of the labour force, but they also have considerable class privilege. This is a really complex issue, and it might be instructive to think about how portrayals and perceptions of teachers compare to those of academics on the one hand and social workers on the other. All three groups are certainly subject to ideological attack, but it's more subtle and multilayered than "proletarianisation" would suggest.

By: Mr. Bad Example

Mr. Bad Example — Thu, 25 May 2017 08:50:29 -0800

The only reason Mrs. Example and I can afford to live in our area of London is that our landlady is severely undercharging us (Shh!) and hasn't raised our rent in seven years. Of course, she doesn't really maintain anything that well and the western wall of the house is kind of near-collapse-y in places, but still. Semi-affordable. Regardless, though, I've been broadening my job search to some of the more northerly parts of the UK, where we could get, say, a two-bedroom terraced house with a garden for what we're paying for our current one-bedroom place.

By: miyabo

miyabo — Thu, 25 May 2017 08:52:32 -0800

Is there anywhere that renting isn't grim in 2017? Minneapolis is doing very well - the cold keeps people from around the country from moving here, and the massive amounts of empty land around the city keeps the price for land low. Rents are definitely rising but nowhere near on the scale of comparable cities.

By: The Card Cheat

The Card Cheat — Thu, 25 May 2017 09:13:48 -0800

By: soren_lorensen

soren_lorensen — Thu, 25 May 2017 09:15:45 -0800

a body politic "so ashamed of not being rich that they will vote as though they were". Oh, hey, welcome to our American nightmare, Brits. Settle on in, it's a hell of a ride.

By: signal

signal — Thu, 25 May 2017 09:15:48 -0800

I'm sure the market will correct this.

By: sevenyearlurk

sevenyearlurk — Thu, 25 May 2017 09:49:20 -0800

My wife and I are your Toronto doppelgängers, Mr. Bad Example; our rent has only gone up a total of $55 (CAN) in sixteen years. If and when we have to move out of our place we'll almost certainly be looking at dramatic increases in rent and commute times, and a dramatic decrease in the size of our living space. I'm another very lucky Torontonian -- my rent has not increased at all in 11 years. Ontario just finally passed a new tenant protection act a week ago -- previously rent controls only applied to buildings built prior to 1991. Now, of course, all the Econ 101 fetishists claim that renters will be harmed by these protections, and the property speculators who have been gouging tenants to cover their mortgages while gambling on the current bubble are upset.

By: pharm

pharm — Thu, 25 May 2017 10:23:14 -0800

Now, of course, all the Econ 101 fetishists claim that renters will be harmed by these protections Well, kinda. Initially it's great, but long term? Doesn't seem to work that way. Rent control splits the population into two halves, those who are in rent controlled accommodation & those that aren't. As time goes on the former end up stuck where they are, whilst the latter is ends up priced out of what little accommodation is available on the open market, whilst maintenance & new building drops as the loss of profits from rent control bites. There's no housing clusterfsck that rent control can't make worse as far as I can tell. If you want to solve a housing shortage, build more housing. Don't make it even more difficult for the people that want housing to get it. (For some reason in these discussions, Germany always crops up as the exception to this rule, but I've never seen a decent explanation as to *how* they manage to avoid all the traps that rent control usually falls into. Any pointers?)

By: tel3path

tel3path — Thu, 25 May 2017 10:34:58 -0800

Well, see, this is why I stick to my guns about land taxation (Henry Georgism) being the solution, going for the root of the problem rather than artificially imposing controls on what individual properties can charge. We really need to get our imaginations beyond "but let's pare off this little sliver of cheese and move it to the other maze". Land speculation is also why I can't get enthused about the idea of Universal Basic Income in its current form. It would simply raise rents and become a government subsidy to landlords. You can help *a person* by raising their income but you can't help *all people* by raising everyone's income because rent-receivers will simply take it from them until their standard of living is just as bad or worse than it was when they started. This is also why I get upset about the idea of tiny housing and microflats - not because they're not cute on an individual basis (I actually love them in and of themselves), but as a movement, the idea that reduced living space is good for society. Accepting micro-sized living spaces will not reduce rent, it will simply reduce the amount of living space available for the same rent, and life will become unbearably uncomfortable for the majority in a very short time. And sure enough, office buildings are being converted into micro-studios, smaller than a Travelodge hotel room (which is 13'2" x 11'4"), in outer London for £800 a month. That's about 50% of the net median income for a single adult in Britain (ETA: took gross incomes from 5th and 6th decile, averaged them, used tax calculator to estimate net take home pay from that). No communal living space in the buildings for storing bikes and such; each studio below the recommended size per person for human well-being; buildings not designed for residential occupancy so highly likely to overheat.

By: Artful Codger

Artful Codger — Thu, 25 May 2017 10:38:32 -0800

Even luckier Torontonian here - we managed to buy and pay off a house in Toronto (28 years). At the time we bought, it seemed like a big risk, and we had advantages (2 decent salaries, I can do most residential work myself) and made some sacrifices (crap house, fewer vacations or other splurges, older cars)... but compared to today's price-to-income ratios in Toronto, we had it easy. We did what we were told to do, right? The middle-class dream was to own your own home. Now, especially when looking at world-class cities like London, NYC, San Francisco, and now Toronto... we are part of a Ponzi scheme and we just happened to get in early enough, it seems. If you want to solve a housing shortage, build more housing. The problem isn't a housing shortage, there's lots available. The problem is unaffordable housing. Simply building more housing won't solve the affordability problem, it's just feedstock for the developers, speculators and foreign investors who can afford to play the game.

By: tel3path

tel3path — Thu, 25 May 2017 10:40:39 -0800

"Ponzi Scheme" just about nails it, Artful Codger.

By: srboisvert

srboisvert — Thu, 25 May 2017 10:45:53 -0800

In the mid-00s, even she was admitting that the increase in the price of her current house was no good to her, because when she sold it, what would she buy with the money? Another house. And now she needs a bigger house because of her expanding family. Too bad house prices are going up! You are missing the critical Tory demographic that does benefit from an inflating real estate market. The retired or retiring boomer homeowners whose kids are off to school. They get to sell their house and downsize. In pre-Brexit times they could even move abroad to low cost housing markets in Spain or Greece. Sure their kids are fucked but that really has never stopped the boomers before.

By: tel3path

tel3path — Thu, 25 May 2017 11:02:34 -0800

I'm aware of that fact. At every Ponzi scheme there is always a small number of people at the top that do make out. That doesn't change the fact that it is only a very small minority that will benefit, to the detriment of those below. I live with my mother in a low-value house. If she needs residential care, the house is what will pay for it (the cost of residential care far exceeds my entire income, and I have an above average income). I won't have any legal right to continue to reside there after her death, as I won't be either a pensioner or a child at that point (previously, I understood that I could secure that legal right by becoming her main carer myself at home, but that doesn't seem to be the case any more). Theoretically, the council can take the cost of the care as a charge against the house, but my council seems to have a record of not wanting to comply with that even though it's theoretically a legal requirement. They also can evict much more readily if for whatever reason I couldn't pay the money back. It is possible that the reason the council doesn't issue many charges against the house to pay for residential care, is because I live in an area with low-value housing occupied by multiple family members, typically. That might mean I'm not made homeless after my mother's death. But I can't count on it. I cannot save a deposit on even the lowest-value home and I cannot expect to pay off a 25-year mortgage this far into middle age. Also, if you lose your home because of debt in my area, the council has no obligation to rehouse you (not that any council has ever fulfilled this theoretical "obligation", hence my childhood experience with substandard rental housing). I went to university with massively privileged people who assumed you either got a council house handed to you or you lived like they had. They were all like "tra la la, I don't care about money, I don't need a high paying job" expecting to live a whimsical life of riding a second-hand bicycle to work and wearing inexpensive cotton clothing from India that still smells of patchouli no matter how many times you wash it. Nothing prepared them for the actual reality that was coming for them, and now it's happening to them they finally understand that it's real. But it's always been real for some of us.

By: howfar

howfar — Thu, 25 May 2017 11:11:02 -0800

The problem isn't a housing shortage, there's lots available. The problem is unaffordable housing. Simply building more housing won't solve the affordability problem, it's just feedstock for the developers, speculators and foreign investors who can afford to play the game. To some extent this is true in London, where the market is artificially distorted beyond recognition, but the UK, in particular southern England, is also suffering from a genuine housing shortage, with, in particular, a shortage of affordable housing. My view, as someone who works in housing, is that the only viable means of addressing this is the construction of relatively desirable social housing, with decent tenure, along with an end to "right to buy" and "right to acquire" schemes. Simultaneously, we need to improve rights for renters (although not going back to the postwar pre-1988 model of strict rent controls and permanent tenure, which does not, in my view, encourage best use of housing supply). I am unusual for a housing lefty, insofar as I favour the phasing out of lifetime tenure in social housing, in favour of decent tenancy periods, genuinely affordable rents (set with reference to incomes, not the housing market) and robust procedural protections for residents (especially those with resident children) in relation to the renewal of tenancies. But all of this would be rearranging deckchairs on the Titanic if not accompanied by a social housing building programme.

By: howfar

howfar — Thu, 25 May 2017 11:22:58 -0800

Also, if you lose your home because of debt in my area, the council has no obligation to rehouse you (not that any council has ever fulfilled this theoretical "obligation", hence my childhood experience with substandard rental housing) This is sort of a complex area to discuss, and my professional experience of your local authority is that they're a bit of a nightmare in relation to homeless applications (they are very, very determined to discharge any duty into the private sector, which is their legal right, but I, personally, have broader issues than that with their practice in this area). On the other hand, the law is the law, and it might be useful to seek professional advice from a law centre, Shelter, etc. You may have already done so, of course, but certain things about what you say ring alarm bells for me, which suggest that you might be able to protect yourself better if you get some really good advice (which can be harder to come by than I wish). Anyway, good luck!

By: tel3path

tel3path — Thu, 25 May 2017 11:29:22 -0800

Thanks, howfar, we haven't actually gotten to the point where she needs residential care and she may never need any. And if we do get to that point, everything may have changed. But if it comes to that you can bet your boots I will get legal advice and consult Shelter too. I've just talked about the situation as I have been able to discern it from reliable media coverage (Which?, BBC News, etc.) My individual situation may turn out to be different.

By: sevenyearlurk

sevenyearlurk — Thu, 25 May 2017 12:12:22 -0800

Well, kinda. Initially it's great, but long term? Doesn't seem to work that way. Rent control splits the population into two halves, those who are in rent controlled accommodation & those that aren't. Ontario's controls aren't the same as what you might be thinking. Now, all rental properties will be "controlled" in the sense that landlords will only be allowed to increase rent for existing tenants by up to a certain percentage annually. If a tenant vacates their apartment, the landlord can set whatever new rent they think the market will bear. The legislation also tightens a loophole that allowed a landlord to evict if they planned to use the unit themselves or for their family. Now, they'll need to provide proof that this is what is actually happening, and they need to compensate the tenant with a month's rent. Critics complain that these controls make it uneconomic to build any new rental housing stock. However, precious little was built in the last 25 years, when no controls applied to post-1991 units, so it doesn't seem like a very convincing argument for continuing to leave renters unprotected.

By: ghharr

ghharr — Thu, 25 May 2017 12:54:12 -0800

The problem isn't a housing shortage, there's lots available. The problem is unaffordable housing. Simply building more housing won't solve the affordability problem, it's just feedstock for the developers, speculators and foreign investors who can afford to play the game. I'm sure there are regional differences but in many US markets there absolutely are housing shortages. A biennial report from the federal government titled The Components of Inventory Change found that the nation's housing stock increased by a net 270,000 units between 2011 and 2013—the slowest growth measured by the survey over the past decade, which included the worst years of the Great Recession. The report concluded: "Despite the gradually improving economy, there were large declines in both new construction and net additions to the housing stock during the 2011–2013 period compared to the 2007–2009 period." A recent Freddie Mac market commentary noted that the total number of housing starts (single family plus multifamily) in 2015 was 30 percent below the historical average between 1970 and 2007. The National Association of Realtors estimates that the country's supply of for-sale and rental units combined is 3 million units short of current demand.

By: LastOfHisKind

LastOfHisKind — Thu, 25 May 2017 13:14:27 -0800

I've been thinking about all these residences built solely as instantiated money, never to be lived in, and how that might play out in the long term. Imagine, 50 years from now, a steady stream of time-capsule apartments coming on the market full of never used appliances and furniture. The year is 2080 and, for the first time in over six decades, the door to a high rise London flat creaks open. Inside, a thick layer of dust covers the finest furniture available circa 2017. Brightly colored fabrics are now faded due to the light from the floor to ceiling windows offering panoramic views of the city. In the kitchen sits a high end range, never used, still has the owner's manual resting on top. In the bathroom waits a shower, made of the best Italian marble, in which no one has ever bathed. The workman quickly takes all this in and speaks to his DataPanion hovering nearby. "Holy crap, ANOTHER ONE. Mark Unit 6418 as clear. That's the last one. Go ahead and schedule the building for recycling."

By: Segundus

Segundus — Thu, 25 May 2017 13:20:42 -0800

When they said "foreigners" they didn't mean Russian or Saudi land speculators would leave London. Oh, they did; this is just ten seconds' googling, but there was a lot of this sort of thing... In a sign of property market jitters, City lawyers said investors in commercial property were adding Brexit clauses to contracts allowing them to pull out of purchases. Law firm Nabarro said buyers were putting down deposits that would be refundable if the UK voted to leave. The firm's senior partner, Ciaran Carvalho, said: "We have seen a marked increase in the number of contracts which include clauses to protect the position of buyers investing in UK real estate ahead of the European Union referendum," he said. "Brexit is a leap into the unknown. Brexit clauses are a pragmatic, legal response to that uncertainty." Earlier this week, the developer behind new luxury flats in London said it would give buyers the chance to pull out of purchases if they did not like the outcome of the vote.

By: Segundus

Segundus — Thu, 25 May 2017 13:34:48 -0800

I mean, I remember because George was quoted as saying "Beware! If you vote for Brexit house prices will fall immediately!" And I thought, Jesus, whose side are you on, George? Do you not understand that a lot of people, who don't happen to own a property portfolio but might want to buy a house, would welcome that?

By: Artful Codger

Artful Codger — Thu, 25 May 2017 13:42:40 -0800

ghharr - my comment about supply was mostly to do with the big centers we were discussing. I take your point that US housing starts are down, but even that pro-development article you linked to says that only about 35% of the recent starts are priced at US$250k or less which was given as the affordability limit for the average buyer. Ity also noted how housing prices were still increasing an average of almost 8%/year, and we all know that's well above the rate of wage/salary increases. So we're both right. Fewer housing starts, and fewer of those new homes are affordable.

By: tel3path

tel3path — Thu, 25 May 2017 14:10:41 -0800

Yeah, yes, I apologize for implying they "meant" anything would happen after Brexit. That would be a fundamental misrepresentation of the whole Brexit thing. But yes, George's remark about house prices falling... yeah that would be bad for those with extensive propp'tee portfolios and it would also be bad for those who would go into negative equity. Whereas the current situation is only bad for those who would quite like to be housed. In the current system of things, house prices are bad, full stop.

By: clew

clew — Thu, 25 May 2017 14:37:03 -0800

It flummoxes me because I think of council housing, as the UK had it by the 1960s, as a dream we could hardly reach in the US -- and then I read about its Right to Buy expropriation (enclosure?) and remember why people piss on Thatcher's grave.

By: late afternoon dreaming hotel

late afternoon dreaming hotel — Thu, 25 May 2017 14:45:33 -0800

Just browsing around a bit, flats in those neighborhoods seem to roughly be where we are in D.C. in terms of price. A (former) friend of mine from my DC years, who herself still lives in DC and works for AEI (in addition to living in a condo purchased with a down payment given to her by her parents), has a hobby of railing on things like minimum wage increases for fast food workers in the city. In her mind, low wages are solely the domain of minimum wage workers who could or should be replaced by machines. Every time we see each other, this inevitably comes up. She's unwilling to admit that nurses, teachers, and just about everyone else from families not replete with defense contract largesse are in legitimate need of a bump in income relative to expenses. In her mind, this situation is a natural extension of laziness and an unwillingness of people to simply move where they can afford living. She's not from DC. She moved there with family assistance. This means nothing to her. The future seems to hold a hard climb out of this mindset.

By: srboisvert

srboisvert — Thu, 25 May 2017 15:49:14 -0800

"Across the UK, the professorial average was £66,282, for senior lecturers and researchers it was £44,916, for lecturers £36,489 and researchers £30,161" The average property in London is £582,321. So the very luckiest academics who get the UK equivalent of a tenure track job can buy a house with about 20 years take home pay once they make full professor.

By: octothorpe

octothorpe — Thu, 25 May 2017 18:02:55 -0800

Is there anywhere that renting isn't grim in 2017? The median rent for a one bedroom here in Pittsburgh has finally gone over $1000 which is getting people here pretty upset but the medium home price is $121K so it still makes more sense to buy than rent here.

By: hoyland

hoyland — Thu, 25 May 2017 18:06:22 -0800

On the subject of councils and their inability to house people, I have an aunt who's been "temporarily" living in sheltered accommodation for as long as I've been alive, waiting for the council to find her a flat. Of course, that means god knows how many people have been stuck in hospital longer than necessary because there was nowhere for them to go, as she's surely not the only disabled person who could be living more independently who's been stuck waiting for 30 years.

By: Ray Walston, Luck Dragon

Ray Walston, Luck Dragon — Thu, 25 May 2017 19:12:09 -0800

Why aren't these real estate investments being squatted in? Why aren't luxury construction sites spontaneously catching fire?

By: The Whelk

The Whelk — Thu, 25 May 2017 19:14:40 -0800

Yet

By: vacapinta

vacapinta — Thu, 25 May 2017 20:10:40 -0800

Oh man, we left London in 2011 because we thought it was getting a bit bad-value-for-money. That is, the interesting shops were disappearing and it was all becoming grim. I just found the place we used to rent (actually a similar one next door) going for *twice* what we paid - and we paid a lot. We're in the countryside now, in a really pretty village and with easy accces to Bristol and Bath. Bristol seems to feel like London's East End used to feel and the arts scene is thriving while the food scene is fantastic. Our quality of life has gone up tremendously since we moved out of the Big Smoke.

By: wibari

wibari — Thu, 25 May 2017 21:42:46 -0800

it's economic activity around the land that gives it its value. No economic activity, no land value. true enough. but so long as people surrounding the ultra rich areas feel they must be there to be employed, even if it means living 8 to a room, their toil will subsidize this disgraceful situation.

By: tel3path

tel3path — Thu, 25 May 2017 22:44:49 -0800

Right, as long as. Until there's no more employment even under those conditions.

By: pwnguin

pwnguin — Fri, 26 May 2017 00:01:51 -0800

So like, the average monthly rent in London is apparently £1,329 for a one bedroom. Currently equivalent to $1,730. That seems kinda low for a world class, financial hub city. NYC is averaging $2,700. SFBay is $3,360. Even Seattle is $2,000. It's higher than where I choose to live and work (for the moment), but this is a low hurdle. I guess this does explain why the average London web developer earns under $50,000 USD, which is like starting wages in the US.

By: Dysk

Dysk — Fri, 26 May 2017 01:16:57 -0800

Land speculation is also why I can't get enthused about the idea of Universal Basic Income in its current form. It would simply raise rents and become a government subsidy to landlords. You can help *a person* by raising their income but you can't help *all people* by raising everyone's income because rent-receivers will simply take it from them until their standard of living is just as bad or worse than it was when they started. There isn't anything stopping you keeping a a.Housing Benefit scheme alongside UBI. Yes, like the current system, it would be a subsidy for landlords, but it doesn't necessarily follow that UBI would be eaten entirely by rents. Why aren't these real estate investments being squatted in? One of the first things the Tories did after coming to power in 2010 was utterly gut squatters' rights.

By: ambrosen

ambrosen — Fri, 26 May 2017 01:18:35 -0800

Web developers in London earn zero dollars on average, and the Glassdoor figure of £30k seems extremely low, being a tiny bit over the the national median wage for all jobs. £47k is what the job sites say is median London web dev salary. Also, all the places with affordable rents are pretty messy commutes into anywhere central. I've often wished that minimum wages in the UK were set on a local authority by local authority basis, according to a central formula based on affordability, so everyone who works in e.g. Westminster would be able to afford a one bed flat there, if they chose. Other totally justifiable but impossible to make happen things on my wishlist: central bank inflation targets that include house price inflation; obligations on the providers of buy-to-let mortgages to ensure that the property is fit for the tenants; compulsory negative equity insurance on mortgages, as well as some protection of positive equity (possibly guaranteed buyback prices from a central fund at x% of what the expected resale price was 5 years previously). All of these are plausible, and of course in theory these are the exact reasons financial markets exist: to provide liquidity to consumers. But they're all off the table, even for spitballing models of how things could work.

By: Dysk

Dysk — Fri, 26 May 2017 01:29:37 -0800

I've often wished that minimum wages in the UK were set on a local authority by local authority basis, according to a central formula based on affordability, so everyone who works in e.g. Westminster would be able to afford a one bed flat there, if they chose. There are so many reasons why this is a bad idea, like wow. Besides, with Housing Benefit already being set by local authorities, theoretically It should be possible for anyone to get a reasonable flat anywhere (as long as local authorities set the subsidy level and maximum earnings with respect to the local property market, like they're fucking supposed to - which means in practice that they obviously don't).

By: Dysk

Dysk — Fri, 26 May 2017 01:40:09 -0800

My personal favourite proposal here: massive property taxes on empty houses, and smaller but still substantial taxes on rental income (or on property where the owner is not resident, or second properties) - make it utterly unaffordable to hang on to houses standing empty, and make rental income covering mortgage expenses (i.e. getting someone else, such as a Housing Benefit tenant, to pay your mortgage so you can enjoy/join the rent-seeker landlord class) a non-starter. If it's financially unviable to buy a house for any other reason than to live in it yourself, prices will fall. Houses as homes, not investments.

By: tel3path

tel3path — Fri, 26 May 2017 02:29:58 -0800

That's an idea, and a good one, but if land value were taxed instead of productivity, it would be unprofitable to hold land out of use anyway. But using taxes to beat up people for holding empty houses would be fun too. (Would have to handle edge cases so people making honest - not fiddled - attempts to sell their house didn't get penalized while it was on the market, which also would be used to undermine the concept of taxing empty houses. But, you know what I mean, details.) (Also details: supposing someone is going abroad for a time and is uneasy about renting to a stranger. How to handle scenarios like that. But, details.)

By: ropeladder

ropeladder — Fri, 26 May 2017 02:38:24 -0800

Surprised that nobody (unless I missed it) has mentioned taxing foreign ownership. Didn't Vancouver and I think Toronto just enact this? Has it been successful?

By: Dysk

Dysk — Fri, 26 May 2017 02:59:44 -0800

Re: details, those are absolutely important, but also absolutely solvable. Grace periods when properties first go up for sale, grace periods when someone is leaving the country/does not have another residence, and you'd probably need some kind of exemption or grace period for developers, too (so that you don't just create a massive liability for yourself if you're constructing an estate).

By: rory

rory — Fri, 26 May 2017 03:52:20 -0800

srboisvert: So the very luckiest academics who get the UK equivalent of a tenure track job can buy a house with about 20 years take home pay once they make full professor. Might be worth reminding non-UK (-Australia/NZ) readers that "full professor" means something very different here than in North America. Most UK academics are lecturers of one kind or another, and aren't called "professor". A professorship is the ultimate endpoint for some, but not most, and tends to come towards the end of their careers, unless they're real high-flyers. Even if you do make professor, unless you get there by your mid-40s you won't make 20 years' worth of take-home pay at that level. pwnguin: That seems kinda low for a world class, financial hub city. Don't forget that the pound tanked after the referendum. It's about 12% down against the US dollar compared with this time last year (or, conversely, the USD is 14% up on the pound), but wages haven't grown anything like 14%. Year-on-year to March 2017, "adjusted for price inflation, average weekly earnings including bonuses increased 0.1 percent and average regular pay excluding bonuses fell 0.2 percent, the worst since 2014". As for the financial hub, looking at a borough like Tower Hamlets (which takes in the City and Canary Wharf) might be a better guide than the London average overall, because London covers a huge area. Your link has average monthly rents for 1BR in Tower Hamlets eating up 70% of average take-home pay in that borough.

By: ambrosen

ambrosen — Fri, 26 May 2017 04:24:24 -0800

There are so many reasons why [variable minimum wage by local authority] is a bad idea, like wow. To clarify, I've thought about this a fair bit more than I put into words here, and it's not as nonsensical as it seems. It'd need to be set according to a fixed methodology, smoothed out across neighbouring authorities, and it'd be necessary to enforce that the location of the job actually matched the location of the wage rate, but the idea that every job should pay enough to live fairly locally to the place of work is not unreasonable. (I'm continually pleasantly surprised by the number of my friends who work in central London who got to the top of social housing waiting lists, and have affordable rents. Including one in Westminster.)

By: Dysk

Dysk — Fri, 26 May 2017 05:05:26 -0800

A lot of cost of living isn't variable like that, though. The net effect of it would be a continual and worsening marginalisation of the North and other poorer areas, as they get asymmetrically priced out of participation in culture (or anything else) in half the country.

By: ambrosen

ambrosen — Fri, 26 May 2017 05:30:44 -0800

Oh, sorry, I wasn't communicating what I envisioned: a minimum wage which covers all of the (e.g.) Joseph Rowntree Foundation cost of living necessities, so that the aim is that the remaining money after paying housing costs is roughly similar in all places. Given that, there would be a hard floor on it. I have a feeling that most of the second order effects of this would be broadly redistributive, because presumably it would reduce the supply of jobs in high cost areas and move them to lower cost areas. And the implementation I'm dreaming of would be revised frequently enough that when the lower cost areas became higher cost because the good jobs had moved there, then the wages there would be rising to match at roughly the same time.

By: acb

acb — Fri, 26 May 2017 06:41:37 -0800

And I thought, Jesus, whose side are you on, George? Do you not understand that a lot of people, who don't happen to own a property portfolio but might want to buy a house, would welcome that? I wonder whether this was one of the Cambridge Analytica targeted ads, shown only to people who are not on the property ladder, but made to look like an anti-Brexit ad aimed at property owners.

By: pwnguin

pwnguin — Fri, 26 May 2017 11:34:08 -0800

Don't forget that the pound tanked after the referendum. That's fair, but IIRC, wages weren't impressive before the vote. Here's an example reddit thread from 3 years ago. It's using the same glassdoor dataset, so some of it could just be glassdoor's methodology sucking. As for the financial hub, looking at a borough like Tower Hamlets (which takes in the City and Canary Wharf) might be a better guide than the London average overall, because London covers a huge area. Wikipedia puts Greater London, with its 32 borroughs, at 1,569 sq km. I'm having trouble finding area estimates for the commuter belt, presumably it's much larger, as the NYC metro area is 34,490 sq km , and SFBay's at 26,250 sq km. Even the Kansas City metro area I grew up in is 21,940 sq km. That's what these rent averages are calculated across, so if you're mentally including the commuter belt, that would presumably lower the average rent further as they weren't included in the figure, AFAICT. If you want to cherry pick Tower Hamlets, then the comparable would be Manhattan, right? Not that it matters much, my financial hub comment was mostly suggesting that such cities tend to be more expensive in general.

By: tel3path

tel3path — Fri, 26 May 2017 13:56:03 -0800

I live in the commuter belt and the cost of commuting has never at any point cost me less than 25% of my take home pay. It varies between 25% and 49%, always has over the past quarter century. The cost of commuting has to be considered a form of rent.

By: pwnguin

pwnguin — Fri, 26 May 2017 16:32:37 -0800

This is true, but since my goal is an apples to apples comparison, I'm mostly concerned about how closely the US vs UK methodologies match up, not whether they reflect the full cost of living and working. It's not like only people in the UK have expenses for commuting from bedroom communities, after all.

By: howfar

howfar — Fri, 26 May 2017 20:29:59 -0800

If you want to cherry pick Tower Hamlets, then the comparable would be Manhattan, right? These sorts of comparisons are very difficult. Firstly, Tower Hamlets has a much smaller population than Manhattan (about a fifth). Secondly it is one of the most deprived areas in England, with, according to the local authority, approximately 50% of children living in poverty, and about 20% of households having an income of less than £15k a year, against a median roughly twice that. Manhattan has enormous inequality too, of course, but not in the same degree of concentration, or in the same stark contrast, as a borough like Tower Hamlets. It's also worth noting that equivalent unit prices for housing between the US and the UK don't take into account how much smaller individual units tend to be in the UK. Broadly, I think that your essential point (as I understand it) is correct, and is, in fact, emphasised by the figures about Tower Hamlets. London's fundamental problem is the lack of housing which is affordable to either a large minority or a small majority of residents, rather than the absolute cost of housing. That's not an uncommon problem in major wealthy cities in the West - indeed it's pretty much endemic. London isn't, in my view, experiencing a unique housing crisis, it's just one example of the overall housing crisis that is affecting much of the developed world, with some particularly stark examples in places like Tower Hamlets. I think the tendency to blame the super wealthy, and in particular, super wealthy foreigners (although there are certain distorting effects in London housing costs as a result of very wealthy people's housing consumption habits) is a fairly major distraction from a fundamental lack of affordable housing supply caused by more than a quarter century of gross underinvestment in housing infrastructure.

By: tel3path

tel3path — Sat, 27 May 2017 01:55:09 -0800

I get this: "It's not like only people in the UK have expenses for commuting from bedroom communities, after all." However, if you're going to make an apples to more apples comparison, a daily train ride (exclude cost of travel *to* the station, parking etc.) 35 minutes into the capital costs *more than* a mortgage payment, and any individual looking for a practical problem-solving solution to high rents in the capital is going to have to factor that in.

By: Dysk

Dysk — Sat, 27 May 2017 02:27:09 -0800

Yeah, the cost of London commuting (and British rail commuting in general) is pretty much on a different level to most anywhere else.

By: UnoDosTresEsto

UnoDosTresEsto — Sat, 27 May 2017 03:28:50 -0800

I just renegotiated my apartment lease and got a AU$30 a week reduction. Taking me down to AU$330 a week for 12 months. Apartment is 12 months old, 1.5 k from the CBD and 250m to the River. Brisbane. I have a spacious 1 bedroom with a "Cook's kitchen", large covered "outdoor room", a bit of garden even and a communal rooftop BBQ and play area. Generally rents are down 20% here. Landlords are offering incentives like free first and last weeks rent, $500 gift cards, free gym membership, allowing pets where previously they were verboten, all kinds of things to attract tenants. They keep building apartments. A lot of middle-income type professionals and blue collar tradespeople are moving here from Melbourne and Sydney where the rental situation is dystopian like London. The food/arts/music/cultural scene seems to be thriving here too. The region is beautiful - beaches, rainforests, lush hinterlands are all driveable. The Winter is glorious. The summers remain a long and muggy deterrent to many though. For the first time in my life as a renter I feel as though I actually hold some of the cards. My point is not to sound like I work for Brisbane.Marketing.com. My point is as others have pointed out that I think that there are often overlooked second or third cities and regional towns everywhere with a lot to offer.