2016 Economic Crisis Thread - Duck and Cover?

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Will the global economy implode in 2016?
	We're hosed - I have stocked up on canned goods
	My private security guards will shoot the paupers
	We'll be good or at least coast along
	I have no earthly clue

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Cicero: Dec 17, 2003; Jumpjet, melta, jumpjet. Repeat for ten minutes or until victory is assured.

readingatwork posted:

Honestly I'd settle for micro-apartments becoming more of a thing in the US. At this point I'd live in a closet with a mini fridge in one corner and a shitter in the other if it meant that I could get out of my parent's house and wouldn't need to rely on roommates.

Good luck with that, every time a micro apartment complex goes up, people get really mad about what housing others choose to live in. It's not to their personal tastes, you see, and therefore should not exist, and furthermore anyone who prefers it is a literal babby. Fine with the trade-offs of a tiny apartment? Too bad, your personal preferences are incorrect and you should feel bad for having them.

edit: \/\/\/ right but they're banned because others find them distasteful.

Cicero fucked around with this message at 02:55 on Feb 12, 2016

# ¿ Feb 12, 2016 01:28

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# ¿ May 4, 2024 00:57

Cicero: Dec 17, 2003; Jumpjet, melta, jumpjet. Repeat for ten minutes or until victory is assured.

on the left posted:

This anger happens because entire families get forced into single bedroom micro apartments, recreating early 20th century slums.

Lacrosse posted:

Re: Micro apartments, the reason people in Seattle hate them so much is because those 200 sq ft closet is going for $900+/mo. If they were actually affordable it wouldn't be an issue, but as it stands now a lot of people blame them for other rents in the area increasing.

The lack of affordability is an orthogonal problem. A family being so desperate they cram into a micro apartment for $900/month is a tragedy no doubt, but the reason why the prices can be so high is because of supply/zoning issues, and without the micro apartments they'd either be in a larger apartment that cost even more, which they would have the option of anyway, even with micro apartments around, or be pushed out further into cheaper areas, which again, they still have the option for that.

I'm not denying how much that situation sucks (I'm currently paying $1900/month for a 1br mobile home in the bay area for my family of 3, it's not terribly fun), but let's say the micro apartments didn't get built. That would solve the problem for that family, because...?

# ¿ Feb 12, 2016 08:36

Cicero: Dec 17, 2003; Jumpjet, melta, jumpjet. Repeat for ten minutes or until victory is assured.

readingatwork posted:

I'm not following this logic. How would adding more apartments (even lovely overpriced ones) make the rent on other more expensive properties go up? You'd think the opposite would happen because of increased competition and lower demand.

More supply does pretty much always lead to decreased overall prices. It's possible that it may lead to increased prices in that neighborhood because the new apartments are nicer, will attract more affluent people, and thus gentrify the neighborhood, but those people would've otherwise bid up housing somewhere else in the city or metro.

But the biggest reason some people think more development = higher prices is because of the obvious correlation: when there's a big economic boom, demand for housing goes up, driving both higher rents and more development. But some people see how they go together and think that somehow the development is what's driving the rents, even if you think about it that makes no sense.

edit: oh yeah and the rents for the new places tend to be higher than what they replaced, for much the same reason that new cars cost more than used cars: they have better features and they're not as worn down. But it turns out, much like how you have to make new cars to eventually get used ones, you have to make new housing before you can get old housing.

Cicero fucked around with this message at 21:29 on Feb 12, 2016

# ¿ Feb 12, 2016 21:26

Cicero: Dec 17, 2003; Jumpjet, melta, jumpjet. Repeat for ten minutes or until victory is assured.

Radbot posted:

That analysis ignores the fact that new development rarely reflects the current housing stock mix. In Denver, for example, there are *far* more luxury apartments and townhomes going up than single family homes, driving up average rents while not reducing demand for lower-end housing as areas become more desirable.

- "Luxury": New stuff is almost always nicer than old stuff. That developers like calling everything "luxury" for marketing purposes doesn't change that.
- Of course the new stuff is higher density, I'm guessing Denver doesn't have a ton of undeveloped space for new detached SFHs, plus increasingly people want to live within good walking/biking/transit distance of the core, which means less sprawl.

quote:

The "new cars vs old cars" argument also doesn't work here because, again, there are far more luxury multi-family apartments going up than anything else, and these won't magically morph into single family homes or working class housing stock any time soon. I'd also take issue with the assertion that new housing stock has "better features" in any meaningful way.

- Why does it matter for affordability that they're apartments instead of SFHs?
- Of course it won't happen anytime soon, just like the working class apartments in the middle of major cities are usually older apartments that have been around at least a few decades.

But if those apartments didn't get built, then the people who would've been in them would do what, exactly? Disappear into the aether? No, they'd be bidding up the price of some other kind of housing around the city.

ToxicSlurpee posted:

One of the big issues with the housing market is that developers always think "what will make me the most money?" and luxury *thing* is what they tend to go to.

It's almost like businesses will do what makes them the most money, and if you can only create a small number of new units due to zoning, of course you're gonna target the high end. Why wouldn't you? It's like if you said Toyota could only produce 10,000 cars a year and then acting surprised that they chose to only make Lexuses.

quote:

This is a process that takes many decades, and doesn't really address the issue - housing affordability NOW, or at least in the forseeable future.

"I don't care if we already know of a sensible solution, we need the problem to disappear TODAY!"

readingatwork posted:

Plus from what I hear (from older contractors) the general craftsmanship of new homes has slowly gone to poo poo over the past few decades as developers constantly try to find quicker and cheaper ways to get houses up.

This kind of sounds like survivorship bias to me. Of course the old homes you see now are very well made, if they weren't they would've fallen apart.

Brannock posted:

Trying to outrace demand by building new supply seems like a losing proposition unless you address the population growth issues. America has added about 70 million people since 1990.

Nah, meeting demand is pretty easy from a technical perspective, it's mostly NIMBYs that are to blame. Like Seattle is doing a decent job of adding more housing, but when the HALA recommendations went out, there was an immediate backlash about the proposals for moderately higher density in the SFH areas (duplexes, triplexes, mother-in-law units) and then the Mayor backed away from that part of the proposal. That's the kind of thing that should be a pretty easy win, but politically it can be very difficult.

Cicero fucked around with this message at 00:41 on Feb 13, 2016

# ¿ Feb 13, 2016 00:38

Cicero: Dec 17, 2003; Jumpjet, melta, jumpjet. Repeat for ten minutes or until victory is assured.

ToxicSlurpee posted:

Except the developers are frequently shooting themselves in the foot by creating entire developments of stuff nobody in the area can afford. Hence mentioning the McMansions. There are places where entire neighborhoods of fancy houses are just sitting empty because they are crappily built, overpriced giant houses nobody wants. Then they're whining "we gotta make our money!!!!"

Source on developers constantly building McMansions that nobody wants to buy? I know that around the great recession that happened as demand for these dumb exurban developments basically evaporated overnight, but when they were still building them it did seem like the demand would be there.

Plus, I thought we were talking about the major metro areas where housing prices are rapidly increasing. I'm pretty sure you're not seeing huge numbers of empty homes in the SF bay area or Seattle or Denver proper.

# ¿ Feb 13, 2016 00:53

Cicero: Dec 17, 2003; Jumpjet, melta, jumpjet. Repeat for ten minutes or until victory is assured.

Oh look:

quote:

To low-income residents and the groups that fight for them in expensive cities, new market-rate housing often feels like part of the problem. If San Francisco and Washington are becoming rapidly unaffordable to the poor, why build more apartments for the rich?

New housing, these voices fear, will only turn affordable neighborhoods into unaffordable ones, attracting yet more wealth and accelerating the displacement of the poor. And so protestors rally against new market-rate apartments in Oakland. Politicians propose halting construction in San Francisco's Mission District.

Economists typically counter with a lesson about supply and demand: Increase the sheer amount of housing, and competition for it will fall, bringing down rents along the way to the benefit of everyone.

It's understandable that skeptics raise their eyebrows at this argument. It's theoretical, based on math models and not peoples' lives. It seems counterintuitive � that building for people who aren't poor will help the poor. But the California Legislative Analyst's Office just released some very good data backing up this point: Particularly in the Bay Area since 2000, the researchers found, low-income neighborhoods with a lot of new construction have witnessed about half the displacement of similar neighborhoods that haven't added much new housing:

Here's another way to look at that: Places without much new market-rate construction are more likely to have displacement. That is, no doubt, the opposite of what protestors want.

Importantly, the benefits of all this building aren't about inclusionary policies, which require developers to set aside some affordable units in market-rate buildings. There's less displacement in high-construction neighborhoods whether they have inclusionary policies or not.

In this research (hat tip to Daniel Hertz for noticing it), displacement is defined when census tracts have population growth over time but a simultaneous decline in low-income households. The researchers also counted census tracts where the overall population was falling � but falling particularly rapidly among the poor.

In tight markets, poor and middle-class households are forced to compete with each other for scarce homes. And so new market-rate housing eases that competition, even if the poor aren't the ones living in it. Over time, new housing also filters down to the more affordable supply, because housing becomes less desirable as it ages. That means the luxury housing we're building today will contribute to the middle-class supply 30 years from now; it means today's middle-class housing was luxury housing 30 years ago.

https://www.washingtonpost.com/news/wonk/wp/2016/02/12/the-poor-are-better-off-when-we-build-more-housing-for-the-rich/

A Buttery Pastry posted:

A solution that's "Wait literally decades" is not really a solution, is it? Especially when you consider continually growing populations. If luxury apartments becoming regular affordable apartments (+ construction of the latter) doesn't happen faster than the growth of the portion of the population who demand these affordable apartments, then the issue won't ever actually go away. And even if population growth is outpaced by the creation of affordable homes, the fact that the population is growing will still delay supply matching demand in a manner that's not economically crippling for many people.

I don't think it would take literal decades to start seeing price declines in desirable metros. If zoning regulations were sufficiently loosened, I think you'd see price declines within 2 or 3 years, and you could get prices down to a reasonable level within 5 - 10 years or so, perhaps a bit longer for the bay area because its problem seems to be particularly bad and long-standing.

# ¿ Feb 13, 2016 19:03

Cicero: Dec 17, 2003; Jumpjet, melta, jumpjet. Repeat for ten minutes or until victory is assured.

call to action posted:

Risk averse has a definition, it means that you won't take a risk that has an equal chance of causing you to succeed or fail.

I...don't think that's correct. Or at least not universally so. Google says:

quote:

risk-averse
adjective
disinclined or reluctant to take risks.

# ¿ Apr 13, 2017 15:34

Cicero: Dec 17, 2003; Jumpjet, melta, jumpjet. Repeat for ten minutes or until victory is assured.

Regardless of how smart it is to start a new business, it's still true that immigrants seem to be less risk-averse than native-born Americans. That's not terribly surprising considering that we're talking about a group that moved to a new country, which is obviously a fairly large risk.

# ¿ Apr 13, 2017 15:37

Cicero: Dec 17, 2003; Jumpjet, melta, jumpjet. Repeat for ten minutes or until victory is assured.

Kind of, although that chart also indicates that you pay the same effective rate at 75k and 300k, even though those are pretty radically different incomes.

# ¿ Apr 15, 2017 14:36

Cicero: Dec 17, 2003; Jumpjet, melta, jumpjet. Repeat for ten minutes or until victory is assured.

the heat goes wrong posted:

Yes. Economists have successfully predicted 14 of the last 5 recessions.

Similarly, there can't be another recession, as goons pointed out in many threads, this last one was the one that finally death spiralled and destroyed capitalism.

# ¿ Jun 26, 2017 08:39

Cicero: Dec 17, 2003; Jumpjet, melta, jumpjet. Repeat for ten minutes or until victory is assured.

ToxicSlurpee posted:

I think we're still pretty strongly in that recession to be honest. We've seen some recovery but that doesn't mean we're out of the woods yet. Recovery from the Great Depression started 3 years after it hit but it lasted a decade easily.

There are still some major economic issues obviously, like rural towns basically dying, hollowing out of the middle class, labor force participation slowly trending downwards, etc. but having issues != being in a recession. GDP hasn't decreased in a long time, and the unemployment rate is very healthy.

Grouchio posted:

That's bullshit and you should know it, considering that the entire globalist capitalist system has not yet reached it's black Thursday. Which will happen sooner or later.

Maybe this is too meta for me or something but I don't understand this post.

# ¿ Jun 26, 2017 13:35

Cicero: Dec 17, 2003; Jumpjet, melta, jumpjet. Repeat for ten minutes or until victory is assured.

ToxicSlurpee posted:

Underemployment is still rampant and there are like three years ever where productivity didn't increase. Growth is pretty "meh" right now and all those things you mentioned make our economy absolute garbage for most Americans.

Growth being 'meh' doesn't mean there's a recession. Words mean things.

How is the economy garbage for 'most Americans' in a way that wasn't also true in, say, 2005?

# ¿ Jun 26, 2017 13:53

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# ¿ May 4, 2024 00:57

Cicero: Dec 17, 2003; Jumpjet, melta, jumpjet. Repeat for ten minutes or until victory is assured.

The DPRK posted:

Following the latest Mark Blyth video (a presentation and Q&A session alongside Michael Roberts), he mentioned that Portugal were doing fine despite being ran by socialist and communist parties.

I'm not sure using Portugal as an example is a great idea, their nominal GDP per capita is only like a third of the US's. Even adjusting for PPP puts them just over half.

# ¿ Jun 29, 2017 16:06

The Something Awful Forums > Discussion > Debate & Discussion > 2016 Economic Crisis Thread - Duck and Cover?