Stream of Foreign Wealth Flows to Elite New York Real Estate(nytimes.com)
nytimes.com
Stream of Foreign Wealth Flows to Elite New York Real Estate
http://www.nytimes.com/2015/02/08/nyregion/stream-of-foreign-wealth-flows-to-time-warner-condos.html?_r=0
67 comments
We could have a healthier, more rational discussion here on HN if we all could be more critical of popular libertarian dogma[1], and not take it as self-evident that private ownership of land is both a right and good economics[2][3].
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[1] By “popular libertarian dogma” I refer to popular dogma that isn’t necessarily supported by and may even contradict true libertarian principles.
[2] For a critique of private land ownership, read about Georgism (https://en.wikipedia.org/wiki/Georgism) and Geolibertarianism (https://en.wikipedia.org/wiki/Geolibertarianism). Are you a Real Libertarian, or a ROYAL Libertarian? (http://geolib.com/essays/sullivan.dan/royallib.html) makes the case against land as private property very plain.
[3] If you believe in the free market and it's ability to find the "right" price for everything, even the abstract (e.g. the time value of money), then how can you support a government enforced system that allows a finite amount of money to purchase an infinite amount of something, which is what ownership of land in perpetuity amounts to? How can $10,000 or even $10,000,000 be the price of full rights over a plot of land for an infinite amount of time?
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[1] By “popular libertarian dogma” I refer to popular dogma that isn’t necessarily supported by and may even contradict true libertarian principles.
[2] For a critique of private land ownership, read about Georgism (https://en.wikipedia.org/wiki/Georgism) and Geolibertarianism (https://en.wikipedia.org/wiki/Geolibertarianism). Are you a Real Libertarian, or a ROYAL Libertarian? (http://geolib.com/essays/sullivan.dan/royallib.html) makes the case against land as private property very plain.
[3] If you believe in the free market and it's ability to find the "right" price for everything, even the abstract (e.g. the time value of money), then how can you support a government enforced system that allows a finite amount of money to purchase an infinite amount of something, which is what ownership of land in perpetuity amounts to? How can $10,000 or even $10,000,000 be the price of full rights over a plot of land for an infinite amount of time?
Heh we could but then we wouldn't be talking about what we're talking about :-). As my philosophically focused friends tend to point out you can talk about anything at all, and still not have a discussion of substance.
I understand the debate about property ownership, but you can either choose to discuss using the system we have in place, or you can talk about the system itself. But trying to talk about both at the same time robs both points of view from the first principles they are starting from. Any argument in one system can be refuted by changing the principles in the other.
The land ownership system, currently in place in the US, may or may not be morally reprehensible and unfair, but that is not the issue to which the NY Times speaks.
I understand the debate about property ownership, but you can either choose to discuss using the system we have in place, or you can talk about the system itself. But trying to talk about both at the same time robs both points of view from the first principles they are starting from. Any argument in one system can be refuted by changing the principles in the other.
The land ownership system, currently in place in the US, may or may not be morally reprehensible and unfair, but that is not the issue to which the NY Times speaks.
Good post. It's important to recognize that libertarianism is itself a diverse collection of philosophies, many of which resemble georgist, anarchist and even some strains of socialist thinking at their foundation. These variants all tend to differ on notions of property as first principal.
I think the 'traditional dogmatic libertarianism' you mention can best be described as paleoconservativism or something similar. It is one end of an extreme with complete disregard of property as the other extreme.
Georgist treatment of land as property is interesting because it doesn't actually deny land as private property, it just treats it as a negative externality to the commons and demands a Pigovian land value tax as recompense. This same philosophy can be extended to any tragedy of the commons, be it environmental, land use, radio bandwidth, etc. One may make property of these things, but at infinite cost for the privilege of such monopoly; a privilege that is guaranteed not by one's own right, but by the social contract of the state.
I think the 'traditional dogmatic libertarianism' you mention can best be described as paleoconservativism or something similar. It is one end of an extreme with complete disregard of property as the other extreme.
Georgist treatment of land as property is interesting because it doesn't actually deny land as private property, it just treats it as a negative externality to the commons and demands a Pigovian land value tax as recompense. This same philosophy can be extended to any tragedy of the commons, be it environmental, land use, radio bandwidth, etc. One may make property of these things, but at infinite cost for the privilege of such monopoly; a privilege that is guaranteed not by one's own right, but by the social contract of the state.
I have always considered myself a libertarian, but recent issues like these have me really questioning how "smart" the free market really is.
I think it goes beyond land ownership too. In theory, I should not be judging other people's values and what they choose to spend their own money on. But when the free market tells us to dedicate our resources to building things like $500,000-per-month apartments, I am not sure I am willing to blindly agree.
https://revaluate.com/blog/highest-rents-in-nyc/
I think it goes beyond land ownership too. In theory, I should not be judging other people's values and what they choose to spend their own money on. But when the free market tells us to dedicate our resources to building things like $500,000-per-month apartments, I am not sure I am willing to blindly agree.
https://revaluate.com/blog/highest-rents-in-nyc/
Best comment in this entire thread.
Infinite ownership of land and "I got here first, screw you" mentality doesn't work when everybody wants to live in the same place.
Infinite ownership of land and "I got here first, screw you" mentality doesn't work when everybody wants to live in the same place.
The "property owned by LLC" issue isn't a _huge_ problem until it's abused. LLC fixes a lot of problems with inheritance and probate, etc.
Look at the property records for Woodside (a city zoned _only_ for residential mansions). Everything is an LLC, but most of them are under the names of the owner (e.g. "Betty Big House LLC") with traceable property tax records.
The strange thing about Woodside LLCs are seemingly nobodies own them. Why does the "philanthropy administrator" at Stanford own a $20 million estate in Woodside? Blarg. It's really nice house too: http://www.trulia.com/homes/California/Woodside/sold/7397232...
Look at the property records for Woodside (a city zoned _only_ for residential mansions). Everything is an LLC, but most of them are under the names of the owner (e.g. "Betty Big House LLC") with traceable property tax records.
The strange thing about Woodside LLCs are seemingly nobodies own them. Why does the "philanthropy administrator" at Stanford own a $20 million estate in Woodside? Blarg. It's really nice house too: http://www.trulia.com/homes/California/Woodside/sold/7397232...
I rent a guest house in Woodside. I really love it. It is the only place that feels "rural" but still able to commute to the valley below. Its nice to be able to rent a sizable house that was 2x the size of my Palo Alto apartment for the same price.
I don't see any negative effects of the LLC property ownership. Woodside is a very tight nit community and I never really felt any wealth gap effects, even though there are a lot of people who are just ranchers. Its not like the people who live in these mansions steam roll over everybody and get what they want they work together to make sure Woodside remains the way it is (small town feel, rural, ranches, horses, etc.)
Its rather unfair to go "blarg" just because someone has a nice house.
I don't see any negative effects of the LLC property ownership. Woodside is a very tight nit community and I never really felt any wealth gap effects, even though there are a lot of people who are just ranchers. Its not like the people who live in these mansions steam roll over everybody and get what they want they work together to make sure Woodside remains the way it is (small town feel, rural, ranches, horses, etc.)
Its rather unfair to go "blarg" just because someone has a nice house.
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Indeed. In many jurisdictions, you can also avoid the tax you pay when the property owner changes (stamp/registration duty)
Why do we allow LLCs to own residential real estate at all, though, unless they're actively working management companies of rental buildings? It seems like the obvious solution to this loophole is to disallow LLCs from owning residential real estate unless they're management companies that take responsibility for renting out and maintaining the building.
Preventing dirty foreign money from entering the real estate market is one of the defining issues of the 21st century. Personally, I think it would be tragic to have all the world's great cities to be owned by Davos shitheads and ex-KGB oligarchs and narcobarons. Let's start fighting this now.
Preventing dirty foreign money from entering the real estate market is one of the defining issues of the 21st century. Personally, I think it would be tragic to have all the world's great cities to be owned by Davos shitheads and ex-KGB oligarchs and narcobarons. Let's start fighting this now.
That's more or less what Copenhagen's done, though it dates back to some old history rather than being really carefully planned out this way. Most of the central city apartments are structured as either owner-occupied cooperatives, or nonprofit housing associations, and only natural people can buy into (in the former) or rent (in the latter) such property. Furthermore they have to be resident natural people, meaning that you declare the apartment as your primary residence, so that cuts out people buying for investment rather than housing purposes. Or rather you can invest, but only in one unit at a time. It also cuts out speculation from people who don't live in Denmark, unless they lie and say they do. But beyond the risk of being caught directly, declaring Danish residency makes you liable for Danish income tax, which is not something most wealthy foreigners want.
As a result, despite Copenhagen getting really popular as a culinary/cultural/etc. destination in the past decade, housing is still cheapish (1-bd ~$800-1100/mo, 2-bd ~$1300-1600/mo).
As a result, despite Copenhagen getting really popular as a culinary/cultural/etc. destination in the past decade, housing is still cheapish (1-bd ~$800-1100/mo, 2-bd ~$1300-1600/mo).
Because there are valid reasons to own property through an LLC.
For example: investing in residential real estate?
1/ What if an investment fund wanted to buy and hold 20 apartments in a building?
2/ What if I wanted to invest in a property, partially backed by debt (hence the need for limited liability)?
For example: investing in residential real estate?
1/ What if an investment fund wanted to buy and hold 20 apartments in a building?
2/ What if I wanted to invest in a property, partially backed by debt (hence the need for limited liability)?
What if an investment fund wanted to buy and hold 20 apartments in a building?
That should be illegal in and of itself. People can't afford apartments because "investors" have bought them all to jack up the prices as rent instead of property. If we had true market-clearing prices for ownership (instead of "the rich get richer and use more money to buy more property to get more money to buy more property"), everybody could be less rentfucked.
It's "excessive landlord" syndrome. Why should one guy be allowed to own 40 apartment buildings full of residents who have lived there 20 years? Shouldn't they own their own living conditions instead of being locked into capitalist "I got here 3 years before you, now I own everything, and you are my source of income forever" mindsets?
That should be illegal in and of itself. People can't afford apartments because "investors" have bought them all to jack up the prices as rent instead of property. If we had true market-clearing prices for ownership (instead of "the rich get richer and use more money to buy more property to get more money to buy more property"), everybody could be less rentfucked.
It's "excessive landlord" syndrome. Why should one guy be allowed to own 40 apartment buildings full of residents who have lived there 20 years? Shouldn't they own their own living conditions instead of being locked into capitalist "I got here 3 years before you, now I own everything, and you are my source of income forever" mindsets?
Not sure i understand. Whether an individual buys a home or an investor buys 20, it doesn't change the price.
Yes it does make a difference because the wealthy individuals who own many units can drive up the price by restricting supply. They can influence zoning laws and block new high-density construction to protect their profits.
That still doesn't make sense. If you have no one living in an investment unit you're losing money. Could an owner of manu units increase pricing by not renting/selling at market rates? Sure but they'd be losing money.
And yet it happens all the time. There are many units in my city in very desirable locations that have been empty for a long time. Often they do temporarily allow people to live there ('anti-squat'), but they can be kicked out at a month's notice and have basically no rights.
What makes this so frustrating is that anyone moving to the city has to either pay exorbitant amounts of money for tiny apartments or rooms, or live far out of the center.
What makes this so frustrating is that anyone moving to the city has to either pay exorbitant amounts of money for tiny apartments or rooms, or live far out of the center.
I'm not Seiji, but I think he wants to make illegal for both investment companies and private individual to own more than a certain number of apartments, in order to prevent real estate price to go up and up, to which I wholeheartedly agree.
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In most cities renters are people who can't or won't plausibly finance the unit themselves. Units are expensive and worth a lot.
What really bugs me about such realty story is these expensive homes are owned but rarely used.
I was at a coastal town 1-2 hours away from Los Angeles a few years ago. Nice houses ON the beach. Bet each house was worth a million to a few million easily. What REALLY struck me was that virtually ALL the houses facing the beach seemed EMPTY. And this was over a weekend. I didn't see kids/family lounging on the deck or the beach.
These nice, big houses were all empty.
The town is too far from centers of commerce like LA to support a large population of people who would make big enough salary that can support multi-millions dollar houses. This means most of the houses are 2nd homes for families.
And I bet a family owning a million dollar beach house would also live in a everyday house that costs similar.
I was at a coastal town 1-2 hours away from Los Angeles a few years ago. Nice houses ON the beach. Bet each house was worth a million to a few million easily. What REALLY struck me was that virtually ALL the houses facing the beach seemed EMPTY. And this was over a weekend. I didn't see kids/family lounging on the deck or the beach.
These nice, big houses were all empty.
The town is too far from centers of commerce like LA to support a large population of people who would make big enough salary that can support multi-millions dollar houses. This means most of the houses are 2nd homes for families.
And I bet a family owning a million dollar beach house would also live in a everyday house that costs similar.
At least NYC builds up, so they fit all of their foreign real estate money in not much space. London is in a much worse position - huge foreign demand with very little new housing supply has made anything remotely close absurdly expensive, which forces everyone to move further and further away and spend $5k+/yr commuting 1hr+ each way on trains.
Manhattan, at least, hasn't really had an increase in housing supply. The population is actually lower today than it was in the post-WW2 era (down ~20%, from just under 2 million then, to around 1.6 million today). Some of that is because of changing demographics (e.g. apartments that once held 4-person families now holding a 2-person couple), but the housing-supply constraint has been a pretty hard cap on population. There has been a lot of construction, but it's gone into mainly: 1) expanding commercial real-estate; and 2) replacing older, smaller residential units with newer, bigger ones. Redevelopment of the 2nd variety sometimes even reduces the number of housing units (but each unit is nicer).
>> huge foreign demand with very little new housing supply has made anything remotely close absurdly expensive
I think this accurately describes NYC too at this point...
I think this accurately describes NYC too at this point...
> As nonresidents, they pay no city income taxes and often receive hefty property tax breaks.
This strikes me as the problem. Why should these people, or for that matter any extremely wealthy homeowners, get property tax breaks?
Indeed, this article makes an excellent argument that high surtaxes should be imposed upon ultra-high-end real estate, and that the proceeds should be invested in infrastructure, public education, and/or tax breaks for the bottom 90%.
The usual counterargument against incresing tax rates at the top is that it will drive some of these taxpayers to take their business elsewhere. Seems like a win-win to me.
This strikes me as the problem. Why should these people, or for that matter any extremely wealthy homeowners, get property tax breaks?
Indeed, this article makes an excellent argument that high surtaxes should be imposed upon ultra-high-end real estate, and that the proceeds should be invested in infrastructure, public education, and/or tax breaks for the bottom 90%.
The usual counterargument against incresing tax rates at the top is that it will drive some of these taxpayers to take their business elsewhere. Seems like a win-win to me.
This has been going on for over a decade in many cities in the world. Vancouver is probably another good example of this.
Allow squatting in buildings that are unoccupied for more than 6 months. That way even the super rich are required to actually have someone live in their unoccupied buldings. If they buy them and live in them then fine, but if not they need to find someone to put in them.
You can't stop people from buying property, and you probably shouldn't. However, you can force them to use it.
You can't stop people from buying property, and you probably shouldn't. However, you can force them to use it.
How do you decide who gets to squat there? Cronyism? Fist fights? Lottery?
First come first served. And if you leave your squat unattended, someone else can take it.
The point is to incentivize rich people to put someone in their building. Not to divy up unused buildings among the homeless.
There are tons of details that would have to be worked out with this idea. But luckily many european nations have been allowing squatting for decades, so there are lots of case studies, and legal examples to draw from.
The point is to incentivize rich people to put someone in their building. Not to divy up unused buildings among the homeless.
There are tons of details that would have to be worked out with this idea. But luckily many european nations have been allowing squatting for decades, so there are lots of case studies, and legal examples to draw from.
Well, you could just have a higher tax on residences not used by someone as a primary residence. Or basically give a tax break/rebate when someone claims it as a primary residence. Which NY already does, actually.
That should be a great outcome for soldiers who go over seas and have to leave their place vacant. Or people in the hospital. Or people that work on long haul shipping jobs.
Breaking and Entering is exactly that: A crime that should land you in jail. If you want free housing, go get section 8- Thats what its built for.
Breaking and Entering is exactly that: A crime that should land you in jail. If you want free housing, go get section 8- Thats what its built for.
Why does the article blithely take it for granted that we should treat investments by rich foreigners suspiciously while investments by rich Americans are no problem? The big problem in New York real estate is lack of supply — the vacancy rate in rentals hovers around 1%, and building new apartments is a nightmare. So of course, prices go up as demand keeps growing and supply is prevented from growing.
There may be some extremely marginal contribution to housing costs that you can blame on these ultra-premium buildings, but it's not the root cause, and playing whack-a-mole with these symptoms is what got the city's real estate so expensive in the first place.
Do folks think that if One57 hadn't been built, a building full of $150k studios would have gone up in its place? Because of the difficulty and cost of building, these money towers are increasingly the only thing that developers can afford to build. Build something more palatable and you'd go out of business.
The backlash to these buyers is IMO a misguided blend of economic misunderstanding and xenophobia. Something tells me that if the rich buyers were all from Colorado, people wouldn't have quite so much to say about it.
There may be some extremely marginal contribution to housing costs that you can blame on these ultra-premium buildings, but it's not the root cause, and playing whack-a-mole with these symptoms is what got the city's real estate so expensive in the first place.
Do folks think that if One57 hadn't been built, a building full of $150k studios would have gone up in its place? Because of the difficulty and cost of building, these money towers are increasingly the only thing that developers can afford to build. Build something more palatable and you'd go out of business.
The backlash to these buyers is IMO a misguided blend of economic misunderstanding and xenophobia. Something tells me that if the rich buyers were all from Colorado, people wouldn't have quite so much to say about it.
economic misunderstanding and xenophobia. Something tells me that if the rich buyers were all from Colorado, people wouldn't have quite so much to say about it.
It's not kind and successful foreign Tim Cooks who just want a place to live.
It's foreign criminals who are laundering money gained illegally through either graft or outright murder/exploitation into US property. Once money turns into property, it becomes "pure" and the chain of illegalness vanishes from view.
American politics has the revolving door between congress critters and lobbyists, but it's not nearly as bad as other countries. The US can't become a safe haven for all the powerful bad people in the world to hide from the consequences of their actions.
Vlad Pootie is worth over $40 billion dollars. Think he's just "a really good businessman?"
It's not kind and successful foreign Tim Cooks who just want a place to live.
It's foreign criminals who are laundering money gained illegally through either graft or outright murder/exploitation into US property. Once money turns into property, it becomes "pure" and the chain of illegalness vanishes from view.
American politics has the revolving door between congress critters and lobbyists, but it's not nearly as bad as other countries. The US can't become a safe haven for all the powerful bad people in the world to hide from the consequences of their actions.
Vlad Pootie is worth over $40 billion dollars. Think he's just "a really good businessman?"
There's no way left to win.
All the "nice" places to live have been taken over by either corrupt foreign actors using illegal money (buying $50 million condos with literal duffel bags full of untraceable cash) or by bubbleheads cashing out funny money and living ego filled nouveau riche lifestyles.
Step in to my own pity party for a moment. Last year my apartment lease went up by $300/month. I have no reason to believe the same won't happen again this year. The employer "yearly raise" last year increased my income by $70/month. Now, it's not my employer's fault I work from home and need space to both sleep _and_ work (in a lavish 700 square foot apartment that's half a mile away from any subway entrance). Forget about trying to move up either. Larger place? An extra $1k-$2k per month. Nicer area? Extra $2k per month for a smaller apartment. Uncontrollable rage starts bleeding from my eyeballs when apartment costs get within horseshoe distance of $50k/year.
What's left? Seattle? Full of Amholes. Chicago? Too cold. San Francisco? Too poor, dirty, and it'll take them at least another 50 years to build out modern-day infrastructure (high density housing + transit). And that's only if current levels of local government corruption don't increase. There's nothing quite like arriving at SFO and being greeted by a BART car from the 1970s then riding into the city past tract house slums cluttering the hills of South San Francisco. But, in rage, I digress.
One can always just give up and move to Austin. It's okay. All the other people who failed out of life and moved to Austin seem to like it just fine.
Also see https://medium.com/@ryanpbroderick/why-im-leaving-new-york-5...
All the "nice" places to live have been taken over by either corrupt foreign actors using illegal money (buying $50 million condos with literal duffel bags full of untraceable cash) or by bubbleheads cashing out funny money and living ego filled nouveau riche lifestyles.
Step in to my own pity party for a moment. Last year my apartment lease went up by $300/month. I have no reason to believe the same won't happen again this year. The employer "yearly raise" last year increased my income by $70/month. Now, it's not my employer's fault I work from home and need space to both sleep _and_ work (in a lavish 700 square foot apartment that's half a mile away from any subway entrance). Forget about trying to move up either. Larger place? An extra $1k-$2k per month. Nicer area? Extra $2k per month for a smaller apartment. Uncontrollable rage starts bleeding from my eyeballs when apartment costs get within horseshoe distance of $50k/year.
What's left? Seattle? Full of Amholes. Chicago? Too cold. San Francisco? Too poor, dirty, and it'll take them at least another 50 years to build out modern-day infrastructure (high density housing + transit). And that's only if current levels of local government corruption don't increase. There's nothing quite like arriving at SFO and being greeted by a BART car from the 1970s then riding into the city past tract house slums cluttering the hills of South San Francisco. But, in rage, I digress.
One can always just give up and move to Austin. It's okay. All the other people who failed out of life and moved to Austin seem to like it just fine.
Also see https://medium.com/@ryanpbroderick/why-im-leaving-new-york-5...
Buy some Merino wool underwear and move to Chicago. Enough rich people and old money to have many of the amenities of NYC, with fewer hipsters and much more reasonable housing prices.
I thought Chicago was hilarious - it's the only place I've lived where two people can walk in opposite directions and both still have the wind blowing directly in their faces.
My perception is that it's sunnier and brighter than NYC, even though its colder.
Agree with the sentiment if not the particulars. Real estate hyperinflation is the devil and must be destroyed.
If you think there is no way left to 'win' it sounds like you've already failed out of life. You aren't entitled to live in Manhattan.
I agree with a lot of what you're saying. That said, I think you're overstating the negatives of many cities.
Seattle? Full of Amholes.
I worked at Google, which is similar to Amazon. Most people weren't assholes. A company can have a really negative culture (most large tech companies do, and I'd include Google insofar as it has stack-ranking, the 18-month rule, and internal-mobility issues) and still have 60-70% of the people be decent, admirable, even fun to be around. Trust me on this. Stop stereotyping people by their company; these "change the world" startups really aren't superior to Google or Amazon or even Goldman Sachs.
New York isn't ruined by Goldman Sachs and Seattle isn't going to be ruined by Amazon.
Chicago? Too cold.
Overstated. Today, it's beautiful. Actually, the average winter day is quite nice: slightly below freezing (great for cross-country skiing, winter running, etc.) but not unpleasantly cold. The coldest winter days require long johns. It really isn't bad if you know how to dress for it.
I won't claim that the climate here is as agreeable as San Diego's, but for a climate north of 40 degrees, it's fine. The coldest days are very cold, but the winter is not as cloudy as Seattle's, not as long as Europe's (mid-late March is actually spring), and not as stormy (in winter) as New York's.
North of 40 degrees, you're going to pay one way or another in winter, whether it's the clouds of Seattle (or Europe) or the cold/snow of Chicago or the 35-degree rain of the East Coast. Personally, I'd pick dry cold and semi-frequent sun.
San Francisco? Too poor, dirty, and it'll take them at least another 50 years to build out modern-day infrastructure (high density housing + transit). And that's only if current levels of local government corruption don't increase.
I'm not going to defend SF. It's a nice place to visit and its topography is incredible. The weather isn't bad. However, it's not a great place to live, and it's already been compromised by foreign money laundering. And, unlike in NYC, that has spread out to the suburbs (Silicon Valley) as well. There's a lot of scumbag money propping up Palo Alto.
All the other people who failed out of life and moved to Austin seem to like it just fine.
That's a crappy characterization of a place, if I've ever heard one. I found Austin to be alright. Remember that 50 years ago, California had the stigma of being where "people who failed out of life" ended up. Then they took over entertainment, technology, and agriculture.
Seattle? Full of Amholes.
I worked at Google, which is similar to Amazon. Most people weren't assholes. A company can have a really negative culture (most large tech companies do, and I'd include Google insofar as it has stack-ranking, the 18-month rule, and internal-mobility issues) and still have 60-70% of the people be decent, admirable, even fun to be around. Trust me on this. Stop stereotyping people by their company; these "change the world" startups really aren't superior to Google or Amazon or even Goldman Sachs.
New York isn't ruined by Goldman Sachs and Seattle isn't going to be ruined by Amazon.
Chicago? Too cold.
Overstated. Today, it's beautiful. Actually, the average winter day is quite nice: slightly below freezing (great for cross-country skiing, winter running, etc.) but not unpleasantly cold. The coldest winter days require long johns. It really isn't bad if you know how to dress for it.
I won't claim that the climate here is as agreeable as San Diego's, but for a climate north of 40 degrees, it's fine. The coldest days are very cold, but the winter is not as cloudy as Seattle's, not as long as Europe's (mid-late March is actually spring), and not as stormy (in winter) as New York's.
North of 40 degrees, you're going to pay one way or another in winter, whether it's the clouds of Seattle (or Europe) or the cold/snow of Chicago or the 35-degree rain of the East Coast. Personally, I'd pick dry cold and semi-frequent sun.
San Francisco? Too poor, dirty, and it'll take them at least another 50 years to build out modern-day infrastructure (high density housing + transit). And that's only if current levels of local government corruption don't increase.
I'm not going to defend SF. It's a nice place to visit and its topography is incredible. The weather isn't bad. However, it's not a great place to live, and it's already been compromised by foreign money laundering. And, unlike in NYC, that has spread out to the suburbs (Silicon Valley) as well. There's a lot of scumbag money propping up Palo Alto.
All the other people who failed out of life and moved to Austin seem to like it just fine.
That's a crappy characterization of a place, if I've ever heard one. I found Austin to be alright. Remember that 50 years ago, California had the stigma of being where "people who failed out of life" ended up. Then they took over entertainment, technology, and agriculture.
That's a crappy characterization of a place, if I've ever heard one.
It's a fine place, but nobody thinks "You know, I'm going to become a tech billionaire then live in Austin for the rest of my life."
It's a fallback city. When you realize you can't make it in SF or NYC or other collapsing-under-wealth locales, Austin looks like a safer alternative.
It's a fine place, but nobody thinks "You know, I'm going to become a tech billionaire then live in Austin for the rest of my life."
It's a fallback city. When you realize you can't make it in SF or NYC or other collapsing-under-wealth locales, Austin looks like a safer alternative.
Way too negative. Austin is a great city in many ways, and a better place to build some kinds of businesses than the big cities you mention. I don't know about your claim on how tech billionaires think - from your first post, it's safe to conclude you're not a tech billionaire so this is likely just your conjecture. I can tell you for a fact that some people have become tech billionaires in Austin. Michael Dell for instance.
Absolutely right. When I think success, I think Michael Dell.
When I think success, I think venting frustrations with my own shortcomings on internet message boards.
I'd take Austin of SF and NYC any day. Nice hot weather, delicious brisket, people are actually nice...
IF you have $50 million in cash to spend on a piece of property, you are laundering the money. There's no other explanation.
Money laundering is considered a big crime and I agree. But sometimes these foreign money flowing into US to buy up realty often smell like a form of money laundering. Can't explain it why but just feel that way...
I think people need to come to the realization that real estate purchases by super wealthy is nothing more than a ponzi scheme.
I could care less what the super rich do with their money. What bugs me is they are hoarding limited resource (housing) in an already impacted area and everyone else ends up suffering for it.
During the housing bubble (as it was about to burst) I recall reading several stories about governments pursuing fraud charges where a family (or a bunch of close friends) would purchase several houses in a neighborhood from one another, each time raising the purchase price.
I would posit that probably in most cases of "real estate investment" by super wealthy, there is little to no difference, except it is not a "family bond" that exists, but a bond of being a member of the most exclusive club on earth. In many cases my hunch is (because of the opaqueness of the market) super wealthy can, and probably do, orchestrate purchases from and to themselves (not even requiring a separate purchasing party), each time raising the prices.
I think noone could argue that this kind of behavior doesn't affect surrounding real estate prices, and thus negatively affect everyone in the surrounding areas.
I would posit that probably in most cases of "real estate investment" by super wealthy, there is little to no difference, except it is not a "family bond" that exists, but a bond of being a member of the most exclusive club on earth. In many cases my hunch is (because of the opaqueness of the market) super wealthy can, and probably do, orchestrate purchases from and to themselves (not even requiring a separate purchasing party), each time raising the prices.
I think noone could argue that this kind of behavior doesn't affect surrounding real estate prices, and thus negatively affect everyone in the surrounding areas.
I should clarify. In fact I don't think super wealthy are necessarily corrupt in this way. I do, however, believe the people they may entrust with managing their wealth are in many cases. And it's not necessarily through any fault of their own. As a wealthy person I want the people who I entrust with managing my wealth to be very successful at what they do. So I make sure I get only the best. That said, I don't care to know "how the sausage is made".
I think the only thing that really fixes this sort of thing is transparency in markets.
I think the only thing that really fixes this sort of thing is transparency in markets.
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Dirty foreign money is more of a problem in NYC real estate than most people realize. Unless we do something about it, it's only going to get worse. London is even farther gone than we are. It's ugly.
Most people see it as a non-problem because they assume that they're in a separate property market from the billionaires, and because the billionaires are such a small set of people. What they don't realize is that housing is an extremely inelastic good, so even a 1% supply destruction is going to have major effects on price-- possibly a 20, 50, or even 100 percent bump. It's not about high incomes (NYC incomes are high, but not that high for average people) or some amorphous "people want to live here". It's demand inelasticity coupled with our failure to keep dirty foreign money out. And the ultra-rich and middle-income markets do interact, if not directly. There's a push-down effect. If dirty billionaires are taking apartments that should be "only" $5-10 million at 5x prices, then the working rich get pushed down into upper-middle-class housing, the upper-middle-class gets pushed into middle-class housing, and on down the line, with the working classes getting absolutely fucked and having 1+ hour commutes.
Moreover, in addition to the foreign scumbag money (which is a problem on the West Coast, just as in New York) you have a lot of gray-water foreign money: overseas speculators who aren't criminals themselves but are betting on increased scumbag-fueled demand for U.S. real estate.
Most people see it as a non-problem because they assume that they're in a separate property market from the billionaires, and because the billionaires are such a small set of people. What they don't realize is that housing is an extremely inelastic good, so even a 1% supply destruction is going to have major effects on price-- possibly a 20, 50, or even 100 percent bump. It's not about high incomes (NYC incomes are high, but not that high for average people) or some amorphous "people want to live here". It's demand inelasticity coupled with our failure to keep dirty foreign money out. And the ultra-rich and middle-income markets do interact, if not directly. There's a push-down effect. If dirty billionaires are taking apartments that should be "only" $5-10 million at 5x prices, then the working rich get pushed down into upper-middle-class housing, the upper-middle-class gets pushed into middle-class housing, and on down the line, with the working classes getting absolutely fucked and having 1+ hour commutes.
Moreover, in addition to the foreign scumbag money (which is a problem on the West Coast, just as in New York) you have a lot of gray-water foreign money: overseas speculators who aren't criminals themselves but are betting on increased scumbag-fueled demand for U.S. real estate.
In London the idea of a 'seperate property market' is totally bunk; it seems like every day a new story comes in with social housing being demolished to fill with fancy apartments. The residents then have to be rehoused somewhere. There are also tens of thousands (possibly 100K+) empty residences in London.
The other problem is that those who already own are both insulated from the effects (mortgage payments from 10 years ago) and stand to benefit if they ever decide to move out of the capital.
It's a huge issue. Re 1 hour commutes; London is far enough gone now that 'the working class' need to cohabit to manage at all.
I have no idea how service workers get by - either they live with friends and family, or they house share. 7-800pm (~9000pa) is pretty much the bare minimum outside of remote areas with no transport links; UK minimum wage is roughly 13K. State benefits jump in to cover the shortfall.
Huge numbers of young people are staying in the family home for much longer. At least they can stay - but it also affects talent moving to the area. A lot of very skilled people are going to be put off by the prospect of permanently 'existing' rather than 'living' in and around the capital.
The other problem is that those who already own are both insulated from the effects (mortgage payments from 10 years ago) and stand to benefit if they ever decide to move out of the capital.
It's a huge issue. Re 1 hour commutes; London is far enough gone now that 'the working class' need to cohabit to manage at all.
I have no idea how service workers get by - either they live with friends and family, or they house share. 7-800pm (~9000pa) is pretty much the bare minimum outside of remote areas with no transport links; UK minimum wage is roughly 13K. State benefits jump in to cover the shortfall.
Huge numbers of young people are staying in the family home for much longer. At least they can stay - but it also affects talent moving to the area. A lot of very skilled people are going to be put off by the prospect of permanently 'existing' rather than 'living' in and around the capital.
Oh; and to comment on the 'efficient use of land' argument that often comes up;
I tend to think that those who were brought up in a certain area, or have some sort of personal attachment (family, significant other) do deserve some thought.
What we're seeing now is just people downgrading and downgrading, professionals living in tiny apartments, the prospect of raising a family disappearing, housing rising to encompass higher and higher shares of income - but demand is not really letting up.
It reminds me of working hours. The economy is not a zero sum game, but after a point it seems as if people are just competing for competition's sake, and everyone suffers as a result - stratification of people with long hours and people with zero/unstable hours, disregard for work/life balance, etc.
I tend to think that those who were brought up in a certain area, or have some sort of personal attachment (family, significant other) do deserve some thought.
What we're seeing now is just people downgrading and downgrading, professionals living in tiny apartments, the prospect of raising a family disappearing, housing rising to encompass higher and higher shares of income - but demand is not really letting up.
It reminds me of working hours. The economy is not a zero sum game, but after a point it seems as if people are just competing for competition's sake, and everyone suffers as a result - stratification of people with long hours and people with zero/unstable hours, disregard for work/life balance, etc.
The situation in London is very tragic. I think it will stop to function very soon.
People don't think enough about the dirtiness of foreign money. In the Middle East, parts of Eastern Europe, and parts of Asia, the fortunates are to a much lesser degree the product of meritocracy and much more the product of oligarchs robbing countries of their resource wealth and laundering it abroad.
Could you stop downvoting michaelochurch all the time? Several responses who agree with him are in the plus, this comment is <= -2. It's ridiculous.
Agreed. "all the time" - is there a history behind that?
You can see for yourself. click on his profile and look at his comment history.
I meant what is the reason, but the comment history does have a lot of down votes. I'd search through them for a reason, but that could a while.
The point you're missing on this website: it's frequented by a disproportionate number of millionaires, millionaires who are carefully investing their money to become billionaires within 10 years, and even present-day billionaires. Any posts addressing concerns of "rich people aren't the best thing ever" often get downvoted.
Maybe also related: a lot of startups take VC funding and current VC funding has shady origins. Some funds are powered by illegal russian investment money hidden through one or two layers of LPs, some is money of different questionable provenance, and some is actually clean money from sources you would expect. but, free money, so who cares if your startup is built on peasant blood money?
Once you've taken VC funding, you're not just in startups anymore, you're in politics of money. Money politics are the worst kind — it blinds you to anything illegal or immoral as long as the money keeps flowing.
Maybe also related: a lot of startups take VC funding and current VC funding has shady origins. Some funds are powered by illegal russian investment money hidden through one or two layers of LPs, some is money of different questionable provenance, and some is actually clean money from sources you would expect. but, free money, so who cares if your startup is built on peasant blood money?
Once you've taken VC funding, you're not just in startups anymore, you're in politics of money. Money politics are the worst kind — it blinds you to anything illegal or immoral as long as the money keeps flowing.
That presumably also explains why this post has rapidly vanished off the front page, unlike the cats in boxes story. I know, someone will tell me it's algorithmic.
Indiscriminate down votes have to be met with indiscriminate up votes. What a daft situation.
Edit: Ah! That also explains why explanatory comments aren't required for down votes - preferential control. I didn't realise how rigged this is.
Indiscriminate down votes have to be met with indiscriminate up votes. What a daft situation.
Edit: Ah! That also explains why explanatory comments aren't required for down votes - preferential control. I didn't realise how rigged this is.
I'm pretty sure that it's one person with 4 or 5 accounts. It has been happening ever since I accused Evan Spiegel of paying/coercing someone to write nice things about him in the press. At first I thought it was Snapchat employees, but the downvotes tend to come all at once and sometimes hit more than a day afterward (you can't downvote 2+ day-old comments, presumably because of stalker-downvoting). I've seen comments go from +3 to -1 in a minute, and at weird hours like 6:00 am.
(I doubt it's Evan Spiegel himself. It would be hilarious if it were so. I'd guess that it's a Snapchat employee of relatively low significance, but I really have no idea who it is.)
(I doubt it's Evan Spiegel himself. It would be hilarious if it were so. I'd guess that it's a Snapchat employee of relatively low significance, but I really have no idea who it is.)
Selling property is a cumbersome and difficult process, selling an LLC is trivial. If you own a property as an investment then you may want to liquidate some or all of that property at a given time to cover other costs. Not really very easy to do if you have to go through a title process. Contrast that with selling someone half interest in an LLC which owns the property. That is easy to do, requires only a notary, and voila you've got cash. I'm all for having direct ownership on your primary residence but for vacation homes, or investment properties, using an LLC is just a whole lot smarter from a money management perspective.