High Housing Prices In Tech Cities Are Now Raising Home Prices In Other States (bloombergquint.com) 253
Tech cities and their high housing prices are apparently now driving up home prices in other states. An anonymous reader quotes Bloomberg:
For some Californians, the state's punishing housing costs, high taxes, and constant threat of natural disaster have all become too much... In the second quarter, only 26 percent of homebuyers in the state could afford to purchase a median-price single-family house, which was almost $600,000, according to the California Association of Realtors... They're making their escape to areas such as Boise, Phoenix, and Reno, Nevada, fueling some of the biggest home-price gains in the country... Almost 143,000 more people left the state than arrived from elsewhere in the U.S. in 2016....
Boise is becoming an alternative to traditional havens for Californians such as Portland and Seattle that have also gotten too pricey, says Glenn Kelman, chief executive officer of Redfin Inc., a national real estate brokerage that recently opened a Boise outpost. About 29 percent of the Idaho capital's home-listing views are from Californians, according to Realtor.com... In Nevada, where Californians make up the largest share of arrivals, prices jumped 13 percent in August, the biggest increase for any state, according to CoreLogic Inc. data. It was followed closely by Idaho, with a 12 percent gain...
[Boise]'s been particularly attractive to Californians, who accounted for 85 percent of net domestic immigration to Idaho, according to Realtor.com's analysis of 2016 Census data... The median existing-home price in Boise's home of Ada County was $299,950 last month -- up almost 18 percent from a year earlier, but still about half California's. The influx is great news for people who already own homes in the area, says Danielle Hale, chief economist for Realtor.com. "But if you're a local aspiring to homeownership, it feels very much that Californians are bringing high prices with them."
Boise is becoming an alternative to traditional havens for Californians such as Portland and Seattle that have also gotten too pricey, says Glenn Kelman, chief executive officer of Redfin Inc., a national real estate brokerage that recently opened a Boise outpost. About 29 percent of the Idaho capital's home-listing views are from Californians, according to Realtor.com... In Nevada, where Californians make up the largest share of arrivals, prices jumped 13 percent in August, the biggest increase for any state, according to CoreLogic Inc. data. It was followed closely by Idaho, with a 12 percent gain...
[Boise]'s been particularly attractive to Californians, who accounted for 85 percent of net domestic immigration to Idaho, according to Realtor.com's analysis of 2016 Census data... The median existing-home price in Boise's home of Ada County was $299,950 last month -- up almost 18 percent from a year earlier, but still about half California's. The influx is great news for people who already own homes in the area, says Danielle Hale, chief economist for Realtor.com. "But if you're a local aspiring to homeownership, it feels very much that Californians are bringing high prices with them."
We need to BUILD MORE HOUSING (Score:5, Insightful)
We need higher density and more housing. The only way to solve this problem is to increase the supply; the ONLY reason this problem exists is because of lack of housing in places people want to live.
We need to rezone R-1 areas for multiple unit housing. R-1 zonings are a massively inefficient use of space and are part of the reason we have so much traffic and sprawl.
We need to give the NIMBY types the finger and BUILD MORE HOUSING. Especially in the Bay Area. It's the only thing that will solve this; even if you were to regulate prices, it'll just turn the problem into "nobody can FIND any housing."
Re:We need to BUILD MORE HOUSING (Score:5, Insightful)
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You'll find that the vacant properties are now occupied in name only (e.g. someone's 2nd home, lent to them at 0% interest rate), or rendered temporarily uninhabitable.
Changing capital gains tax law to kill 'flipping' and make real estate a place to sleep instead of a place to make a fortune would be far more effective, even for occupied properties.
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Or just raise interest rates
An action that disproportionately affects the lower-middle class mortgage owners while doing very little to actually fix the housing problem.
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Takings clause (Score:2)
If you have a problem with that, then YOU can buy the property.
And watch your government plead the Fifth* to "take" you up on that offer. What would you consider "just compensation"?
* The Fifth Amendment to the United States Constitution not only prohibits compelling self-incrimination but also lays the framework for eminent domain, the most common name for compulsory sale under United States law. Other countries' laws have compulsory sale provisions as well.
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Only if they are moving somewhere else with even lower housing prices. If you live in an area where your house appreciated 50%...all the other houses are likely to have also appreciated by 50%. So all that's happened locally is that the price of home ownership has increased.
That is not a good thing.
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There aren't many good reasons for a person to buy expensive housing and leave it completely unused. Eith
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Using taxes to try to change behaviors or as de facto bans on certain things is a slippery slope that we should not ever start down.
I hate to break it to you, but the Federal tax code is 75000 odd pages - most of which were written expressly to change financial behavior.
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To be honest, taxing inefficiency should be something even the conservative crowd should embrace, and vacant housing is inefficient.
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Re:We need to BUILD MORE HOUSING (Score:5, Informative)
You think conservatives should be for this tax?
Yes. It is called Land Value Tax [wikipedia.org], and fiscal conservatives are not only for it, we are the champions of the cause. It is progressives who are usually opposed, so I am not sure why that somehow got inverted here on Slashdot.
It is the least bad tax, and the best and most economically efficient form of taxation. Milton Friedman was an advocate, as was Ludwig von Mises, both demigods of economic freedom.
Unless you are an anarchist, you should accept that some taxes are necessary. Land Value Tax is fair, unavoidable, and unlike many taxes that disincentivize productive activity, LVT actually encourages enterprise.
It has been implemented many places, including Singapore and Denmark. It works well, which is what you should expect, since Milton Friedman was never wrong about anything.
I despise all forms of uncrontrolled taxation (Score:2)
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A Georgian land value tax is nothing short of elimination of land ownership entirely. It's equivalent to the state owning all the property and renting it out to the highest bidder. It's an absolutely terrible tax, unless you're a literal communist.
For the uses to which property tax is usually put, any land value tax (not just the Georgian one) is especially bad. Property taxes cover schools and municipal expenditures. These things scale somewhat by area, but mostly per capita. So a single family house
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No. That would be the income tax, which directly and easily scales with how much a person makes. As opposed to relying on property taxes, which is going to screw over workers the second they retire.
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Someone else already brought up Land Value Tax, so I won't repeat it here, but yes, it's pretty much the only form of taxation that conservatives support and it comes straight from the Austrian school.
Being conservative doesn't mean "I can do what the fuck I want", that's just selfishness. And ignorance.
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Given property taxes are a thing even in California, no one would leave a property vacant unless the rental market is deep in the gutter.
It's things like rent control and unevictable renters that scare potential landlords away. California's thinking about the former, and the latter depends on how poor the tenant is.
Re:We need to BUILD MORE HOUSING (Score:4, Informative)
I don't know about California, but around here there's a lot of money laundering, mostly by foreigners, who are happy to sit on vacant property rather then have the hassle of actually renting it out. For a Chinese billionaire, having assets in the west that their government doesn't know about is the important thing.
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Sorry, but you're mistaken. I know for certain that large-scale landlords purposefully leave certain lots vacant to drive rent prices up by shrinking offer. The profits far outweight taxation.
Re: We need to BUILD MORE HOUSING (Score:2)
Because taxes are the way you shift costs for antisocial behavior to the offender.
Absolutly (Score:3, Informative)
Mod up a hundred times.
Unfortunately our states Leftist have forgotten that being a leftist means first, second, and third, looking out for those with less money.
Developers are evil (never mind all these people's homes were built by them). California will always be an attractive place to live so building more homes won't do anything (never mind the laws of supply and demand). We can't build upwards because we have to protect our community! (never mind that your community is full of working class people who
Re:Absolutly (Score:5, Insightful)
It's all rent control and low income housing which do nothing to solve our massive housing shortage and in some ways exacerbates the problem.
Amen. I'm always amazed every time rent control is brought up as some type of 'solution' to a housing shortage. Number of new housing units created by rent control? Zero. Absolutely NO new housing gets created. And in fact, it TAKES housing units off the market, because it just makes an incentive for people to never move from their rent controlled unit, even when it would make sense...
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There's only one real way to solve the housing problem: Repeal Prop 13. Pass a new law that gives a deep tax break for low-income residents only, and makes that tax break not limited to a specific parcel. Right now, the poor are trapped in their existing homes, because they can't afford higher taxes to move whenever their job changes. And even the middle class often choose to live farther away rather than pay thousands of dollars more in property taxes.
By eliminating that problem, many people will try t
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Proposition 13 was intended to make sure retirees wouldn't be price out of their homes once they had retired, due to the fact they had a fixed income.
It also helps low income workers afford to live close to work since they couldn't afford homes otherwise they would end up living in coffin apartments.
To me, the dynamics of property prices and commutes seem to be no different from stellar dynamics. There is the gravitational pressure of workers wanting to live as close to work and other amenities like good s
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"Proposition 13 was intended to make sure retirees wouldn't be price out of their homes once they had retired, due to the fact they had a fixed income."
Bullshit. Prop 13 was intended to reduce and then keep _Commercial_ Property Taxes low. Commercial Property may not change hands for decades, so those jerks like Chevron and Wells Fargo made out like bandits, still paying assessments based on 1978 values. (The SF Chron estimates that California is losing ~$9B in funding due to this chicanery every year.)
Priv
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I don't see how your solution differs from the current state of things. Pricing in places like SF is already absurd, but businesses still want to stay there.
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To save future readers from a quick trip to Wikipedia, [wikipedia.org] Prop 13 appears to be
(1) a limit on recurring taxation of real estate to 1% of the property's value and
(2) a limit on the year-on-year increase of recurring real estate taxation to 2%, in order to prevent retired people from needing to move when their nest egg can't support the taxation on their escalating home values.
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Around here, property taxes can be deferred until the retiree dies, moves into assisted living or such and the property sells for a fantastic amount. The only losers are the kids who don't get quite as high of an inheritance for being smart enough to be born in the right place. I feel so sad that some people might have to work more for a living instead of getting basically a lottery win.
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And the last time California even hinted that they wanted to implement rent control ...
Several cities in California have rent control, including Berkeley (of course), San Francisco, and my fair city, San Jose.
Rent control is, of course, stupid and counterproductive. It is about as effective as trying to control food prices by legalizing shoplifting.
Nevertheless, it provides short term benefits to people with no long term stake in the community. Students in Berkeley vote for rent control to save money until they graduate, and then they leave town. They don't suffer from the urban decay and e
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So the solution is to implement condo/house price controls in tandem with rent control? I see...
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It also discourages the construction of new rental properties as areas with high rents typically have high land values as well. High rents and property values typically go hand in hand.
Given this, why would anyone buy land to build on if they couldn't charge market rates for rent? It would take far too long to earn back from rent what they spent (let alone make a profit), particularly with property taxes added it.
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How do the rent controls work there? Here, it just limits how fast you can jack up the rents to the rate of inflation + a couple of percent (actually it was just changed to the rate of inflation). You can start at any number you want and the same when changing tenants. There are also workarounds involving upgrades to the building that allow faster rent increases.
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It takes on a lot of different forms https://en.m.wikipedia.org/wik... [wikipedia.org] . In any context I've heard of though it seems to do the opposite it terms of solving a housing shortage. It just eases the symptoms for a minority of people.
Where I'm at it's still mostly being discussed as out of control housing costs only started less than a decade ago. I'm in Sonoma County about an hour North of SF. It's always been a bit expensive here because of the climate but SF's housing problems are now bleeding off and dramtic
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Rent control does encourage more housing to be built. Without rent control you get a lot of expensive housing that often sits empty for a long time waiting for someone willing to pay those sky high rents. Happens a lot in London, all they build are luxury flats.
With rent control there is an incentive to build more affordable homes rather than big luxury apartments or McMansions.
The other thing rent control helps with is ensuring that there are a mixture of people. In some European cities there are laws mand
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"Without rent control you get a lot of expensive housing that often sits empty for a long time waiting for someone willing to pay those sky high rents."
You very clearly don't live in California. The sky high rents are due to a housing shortage. People are lining up to pay these rates because they need a place to live and like living around here. I know renters, when they have to move to a new home they have to move fast on deals like $2,500 for a small 3 bedroom single family house because that's a really g
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I'm amazed you think rent control is supposed to create new housing directly. It's direct purpose is to keep people from being forced to move because they can't afford exploding rents while their paycheck stagnates. It's to prevent gentrification.
Besides, how are bourgeois shitbags going to get their latt
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Unfortunately you wouldn't know a leftist if the entire Soviet Army bit you on the ass. Democrats dominate the state government in California - but they're just another party of right-wing asshole capitalists.
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I live in Woodstock. Bought my house 3 years ago. If I was looking to buy it now, I couldn't afford it. And my house is about the only affordable housing left in that area. All the new construction there now costs twice as much as my house.
This is a big problem where I am. Developers want the maximum return on their investment, so they don't build cheap housing, rather they buy it and tear it down and build something expensive. There's actually a fair amount of vacancies in certain areas due to no one being able to afford the rent. There's also a shit load of expensive condos for sale. Meanwhile the number of affordable rentals is dropping fast.
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We need higher density and more housing. The only way to solve this problem is to increase the supply; the ONLY reason this problem exists is because of lack of housing in places people want to live.
Indeed. Lack of housing in the most productive cities is a major drag on the economy, and also a major cause of inequality [economist.com].
Lower income people are locked out of the cities with the best job opportunities and best pay. Meanwhile, soaring property values enrich the people who are already well off. Liberal NIMBYism may be responsible for even more of the growth in inequality than regressive conservative tax "reform".
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Higher-density can help... but only to an extent.
If you're talking about single-family homes on large lots vs 16-28 foot townhomes of comparable size, yes... it might increase availability and reduce costs.
If you're talking about 50+ story skyscrapers, no... it won't. Skyscrapers are SO expensive to build (per square foot of habitable dwelling), the economics just aren't there to build anything less than luxury condos for the ultra-rich. If the developer is ALREADY spending $300/sf, adding $200/sf for prem
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. It's the same reason why London's streets are a medieval rat's nest, even in areas that were bombed into oblivion by the Luftwaffe during WWII
It's the same reason they're a medieval rats nest after the entire city burned down in 1666. The government started planning a new city with wide, straight roads but the populace rushed back and started to rebuild so they didn't lose their land. It was rebuilt along exactly the same lines as beforeb of course.
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High density housing brings social problems too.
A better option is to build new towns and cities in underpopulated areas, and provide incentives for jobs to be located there, and decent public transport links.
Japan did that recently. A new train line (the Tsukuba Express) was build, with new towns all along it. Each down has decent facilities on its own, plus the trains offer fast commuter access to central Tokyo. Office space is available too, attractively priced to help companies set up outside central To
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NIMBYism is quite bipartisan. My hometown in California is very conservative (largely a byproduct of many of them coming from the defense industry and working for Hughes, Lockheed, Boeing, etc.). These people have very nice houses, some are retired, and they very much vote against any new housing.
And as long as people can leverage their house for money, this is going to be a problem. You can see it here in these very comments, people who want to use houses as investment vehicles (flipping, asset store, HELO
Re:We need to BUILD MORE HOUSING (Score:5, Insightful)
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There is also the opposite, BETTER solution: Stop encouraging more people to be born and immigrating here.
That is a terrible idea. Americans are the most productive and innovative people in the world, and immigrants are able to unleash innovations, energy, and enterprise that were stifled in their homeland. We need more Americans, not fewer.
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The whole system depends on growth. Businesses need an expanding consumer base, and an expanding labour force to keep wages low. Then there's the problem of the aging population. If the majority of the population is retired, who is going to do the work that needs doing, little well the work that would be nice to happen.
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Families don't want to live in high rise blocks. What usually happens is that the more high-rise apartments you build, the more single couples you attract who then start looking for a "icing cake" home or a McMansion.
But there is a great waste of space where there are single story strip malls. In Europe and Canada you will find that they will build shopping malls next to Metro stations, and apartment/office blocks above those. Even strip malls will have three or more levels of apartments above them. Then yo
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Many families would love to live in high rise blocks in California. Working class people in silicon valley are living multiple families per single family home. Meanwhile, small single family homes are going for over a million there. How would either of those be better than an affordable high rise for a family?
Most of the world's major first world cities have plenty of families in high rise housing. I think you're just expressing your own personal bias against such living situations.
You do certainly have a p
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Families don't want to live in high rise blocks.
Bullcrap. If nobody wanted it, then governments wouldn't have pass laws to block it from happening.
There is enormous demand for housing in city centers. In downtown San Francisco, even studio apartments can go for over $1M. Yet it is nearly impossible to build anything.
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Actually they do. Proof of the fact is that city governments must transfer a lot of wealth from high rises to single-family homes [streetsblog.org] just to get people to live in the suburbs.
Then you need government (Score:2)
That was all well and good until "Austerity" kicked in. We kept cutting taxes on the wealthy until we had to start cutting programs, and infrastructure spendin
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the ONLY reason this problem exists is because of lack of housing in places people want to live.
What "problem"? Prices are set by the market. They are what they are. If you don't like them, then find a competing option instead of buying in -- which is what some people are doing.
Naw.... Limited supply AND demand exists AND people are willing to pay up for it. When one talks about housing -- the level of density is a fundamental PART of the product, so fewer people would be interested in a dens
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Nah. You just need to move to a saner part of the country.
NIMBY has right to NIMBY.
No we don't (Score:2)
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there isn't anyone in North America, in the 21st century, that wants to live in a city like Boise.
... except for the 200,000 people that live in Boise, and the thousands more that move there every year.
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Thank the softwood tariffs for at least some of these costs, 10 or 20 grand IIRC.
Help. They're Californicating Idaho (Score:2)
California expats flush with cash (Score:5, Informative)
Long term residents of CA who purchased their homes long ago at a reasonable price can now sell said home for ludicrous amounts of money.
This allows them to move out of State and easily pay cash ( far in excess of the asking price ) for homes where home prices haven't gone full stupid yet.
As the number of homes in an area start selling for insane amounts of money, it drives the asking prices up for all the homes in the area.
It also raises your tax appraisal values so you get to pay more in property taxes every year. Pretty soon, no one local can afford housing in the
area because the asking prices and taxes are so inflated.
Texas median household income is around the ~$60k mark yet, there is a new subdivision full of homes nearby that -start- at $500k.
It's insanity.
** The amusing part is watching folks move into one of these $500k+ homes only to learn that Texas property taxes are uncapped and can
increase by 10% every year. The State loves to advertise that we have no State Tax, but those property taxes more than make up for it. **
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Re:California expats flush with cash (Score:5, Insightful)
I agree with you.
At least a State Income Tax is fixed to your income. The more you make, the more you're taxed.
Whereas property taxes never seem to quit going up.
Becomes a problem when you finally get to quit working and retire. That home you paid $75k for
forty years ago is now tax appraised at $300k ( or more depending on where you live ).
Gets rather tough to keep paying more and more in property taxes every year once you quit working.
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On the other hand, now that you're retired, you can move somewhere even cheaper.
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At least a State Income Tax is fixed to your income. The more you make, the more you're taxed
At least until the point you need to hire an accountant and then the more you make the less tex you pay.
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My dad did this (Score:2)
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Yap. But can you blame us Californians for thinking that Prop 13 exists for every state? I mean, c'mon!
Sure, you can move from Cali to Boise (Score:2)
But remember - at the end of the day, you’ll be living in Boise.
Parts of Idaho are quite lovely... but there’s also Boise.
Don't worry, bubble will pop (Score:2)
Just wait for the Great AI Crash. AI co's are overvalued per actual revenue. Either they'll make bigass breakthroughs to get more revenue, or there's a reality crash coming.
Unlikley (Score:2)
Listening to a radio show for homeowners this morning, they were spouting off about climbing home prices and rising interest rates and isn't that terrible that it's depressing the market. What they were going for is why developers and builders aren't building what they consider affordable housing. Why would they? They have a piece of land of a fixed size and the local government dictates how many homes can be built on it. The builder isn't going to build 100 low-end homes when they can build 100 more ex
Stop House Flipping (Score:2)
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Yes, but that's also known as a "recession". If the housing market returns to "normalcy", we're going into a second Great Recession and even stagflation.
It will be hard for the administration to explain that one away.
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If the housing market returns to "normalcy", we're going into a second Great Recession and even stagflation.
I think you're going to need to explain the logic behind that.
I'm not sure what the scare quotes on normalcy are for either.
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Recessions can be a good thing. Econ 101: they reduce income inequality.
As far as the administration, should I actually care about what Trump & Co can or can't explain away? Having Trump be a one-termer isn't all that sad of a prospect.
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I absolutely agree with you. In fact, during the previous "stagflation" episode, during the Carter administration, it allowed more people to buy homes at lower prices. They had to pay higher interest rates, but as soon as the rates fell again, they were able to refinance. It was the last era where there were significant gains by the middle and lower classes. Once Reagan took over, it was all "trickle down".
Re:Yeah, no. (Score:5, Insightful)
Yes, better than what we have now.
No, it did not, because that inflation was more evenly distributed and meant much larger wage growth. Also, the higher interest rates kept housing prices down and allowed people to actually put some money in the bank and get something back.
It was bad for the stock market, which back then was OK for the middle and working classes because their pension funds had not yet been raided by corporate fuckwads.
This is where you make your error. Higher interest rates mean lower housing prices. Yes, the loans are more expensive, but then as soon as the rates backed off, you could refinance and your house price would go up.
The Carter years were the last years that the middle class and lower actually gained some ground. Since then, it's been a ceaseless downward trajectory.
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Also, the higher interest rates kept housing prices down
Higher interest rates keep housing prices down. They do not lower the housing prices without dramatically affecting those people already in debt to banks. i.e. the lower-middle class.
Sure house prices may drop, but that will be a small consolation to the newly minted homeless.
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Yup, growing up in Boise in the 80s, we were complaining about "liberal Californians" moving into the area. What really happened is that conservative Californians moved to Idaho, making Idaho more conservative now than it was then.
But, yeah, complaining about Californians moving to Boise is at least 40 years old. That said, there has been so much construction that I hardly recognize the place anymore. Almost all the farmland between Boise and Nampa is now city. The increases in home prices will be moder
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Know many women who pack an AR-15
Yes. Several are expert marksmen (women?).
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Pack? As in carry on a daily basis in public?
AR-15s and AK-47s are nice toys for people who want to play soldier and for hunting where legal. Using the self-defense argument here is sort of stupid.
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it's not that difficult to buy something like a .38 revolver in California
Not enough rounds to be a viable self defense weapon. A semi-auto with 15 or 18 rounds is better. AR-15s are ideal for home defense. You don't have to 'pack' them anywhere.
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You are quite obviously a noguns type. The number of rounds a weapon's magazine holds has nothing to do with its penetrating power. A .38 is pretty close to a 9mm.
At least with a revolver, you have to engage your brain before you shoot.
You know nothing about combat. With any kind of weapon, your target is moving. So your probability of missing with a few rounds is high.
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What the fuck are you defending from?
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The Second Amendment was written to ensure that citizens could protect themselves rather than becoming dependent on a police state. The police have no duty to protect individuals. In that, you are on your own.
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You must really be alienated from society, if you think that families would move in mass to a different state just to find more lax gun regulation.
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You must really be alienated from society
Why do you think California has anything to do with 'society'?
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Except we are not landlocked. As long as we are not under a naval blockade, we can still invade Oregon and Washington! (And Canada doesn't matter.)
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Yeah, the last thing we would want to do is cut the public in on all the profits.