Housing Exploitation

[Crawford]

Originally Posted by subterranean

And then you've got people like one of my best friends, who's a programmer for a major health insurance company, making six figures, working remotely in Traverse City in a house that is paid off, and can afford to travel the world frequently.

Traverse City is a pretty odd location for someone who prioritizes "traveling the world frequently". And, while cheap compared to the Bay Area, it's one of the most expensive locales in the Midwest.

[Baronvonellis]

Originally Posted by subterranean

And then you've got people like one of my best friends, who's a programmer for a major health insurance company, making six figures, working remotely in Traverse City in a house that is paid off, and can afford to travel the world frequently.

I don't understand why some programmers can work from home, and other's have to be crammed in a shoebox in SF? Why can't they all work from home from any city they want? It's all done on a computer.

[subterranean]

Originally Posted by Crawford

Traverse City is a pretty odd location for someone who prioritizes "traveling the world frequently". And, while cheap compared to the Bay Area, it's one of the most expensive locales in the Midwest.

Why? He bought his 3 bedroom house right downtown for $100k, and Detroit is a Delta hub. At most, you’ve got a layover in Detroit, Chicago or Minneapolis.

[iheartthed]

Originally Posted by subterranean

And then you've got people like one of my best friends, who's a programmer for a major health insurance company, making six figures, working remotely in Traverse City in a house that is paid off, and can afford to travel the world frequently.

I think that's such a bad idea from a career perspective. My friend is an engineer at Apple and was telling me several years ago that Apple was forcing all of its remote workers to either resign or move to California. Not sure if they are still doing it, but it's hardly the only company that has been reconsidering their remote worker policies.

If you're working in a place like Traverse City and get cut, the market is probably pretty shallow. You'll have to scramble to find another remote gig or relocate to a bigger city.

[Crawford]

Originally Posted by subterranean

Why? He bought his 3 bedroom house right downtown for $100k, and Detroit is a Delta hub. At most, you’ve got a layover in Detroit, Chicago or Minneapolis.

TC is a 5 hour drive from Detroit. Not exactly convenient. Flights from TC to Detroit are limited and expensive. And Detroit is a domestic hub, with not many intl. flights. O'Hare has far more intl. options, but will still be an expensive flight from TC.

And TC's median home price is roughly 2x that of Michigan as a whole. If he paid 100k it was either years ago or like the cheapest house possible.

I mean, if he's happy, great, but I find it odd that someone would pick that location for intl. access and cheap prices. Why not move to a cheap neighborhood in an actual intl. air hub instead of expensive boonies, with costs high due to all the boomer retirees from Detroit and Chicago?

[subterranean]

Originally Posted by iheartthed

I think that's such a bad idea from a career perspective. My friend is an engineer at Apple and was telling me several years ago that Apple was forcing all of its remote workers to either resign or move to California. Not sure if they are still doing it, but it's hardly the only company that has been reconsidering their remote worker policies.

If you're working in a place like Traverse City and get cut, the market is probably pretty shallow. You'll have to scramble to find another remote gig or relocate to a bigger city.

He's been working remotely for one of the largest medical insurance providers in the country for over 15 years, and his work is for a long-term government contract. He could retire at any time, but he likes his work and he just keeps socking away savings.

Maybe it doesn't suit everybody in every situation, but there is so much work out there that it's totally feasible to live and work remotely with a lot of programming or computer-related jobs if you don't want to work for Apple or Google. It's just ridiculous to me that anyone would subject themselves to those SF rents or housing costs unless it was absolutely necessary.

Here in Portland a lot of Intel employees work remotely at least part of the week and you can tell which days of the week because the traffic is dramatically worse or better.

State of Oregon employees work remotely all over the state. Same with a lot of HUD field staff. These are big city wages without the need to live in expensive areas. We're going to see this more and more.

[subterranean]

Originally Posted by Crawford

TC is a 5 hour drive from Detroit. Not exactly convenient. Flights from TC to Detroit are limited and expensive. And Detroit is a domestic hub, with not many intl. flights. O'Hare has far more intl. options, but will still be an expensive flight from TC.

And TC's median home price is roughly 2x that of Michigan as a whole. If he paid 100k it was either years ago or like the cheapest house possible.

I mean, if he's happy, great, but I find it odd that someone would pick that location for intl. access and cheap prices. Why not move to a cheap neighborhood in an actual intl. air hub instead of expensive boonies, with costs high due to all the boomer retirees from Detroit and Chicago?

Because he loves it there, it's super affordable, and his family and friends are mostly within an hour or two's drive. He didn't choose it FOR international access. But to think it's difficult or prohibitively expensive to fly several times per year out of a secondary market is ridiculous when people are paying $1800 per month for a bunk bed. I fly into Detroit and TC several times per year depending on where my parents are. It's often actually more convenient and less expensive in so many ways for me to fly into TC than it is to fly into Detroit.

[Steely Dan]

Originally Posted by subterranean

It's often actually more convenient and less expensive in so many ways for me to fly into TC than it is to fly into Detroit.

but if you're flying from portland, you're gonna have to go through MSP, ORD, or DTW anyway to get to traverse city.

and there's nothing convenient about lay-overs.

[subterranean]

Originally Posted by Steely Dan

but if you're coming from portlan, you're gonna have to go through MSP, ORD, or DTW anyway to get to traverse city.

and there's nothing convenient about lay-overs.

From Portland there is a red eye to Detroit or a MUCH better departure time with a layover in Minneapolis. It is also completely stress free and quick in-and-out at Cherry Capital.

[iheartthed]

Originally Posted by subterranean

These are big city wages without the need to live in expensive areas. We're going to see this more and more.

I think the trend is stabilizing a bit. It won't move completely back to 100% onsite, but I doubt we see significantly more workers convert into 100% remote.

But if you're working in a remote location that is far from a major jobs center, it seems like it would be much harder to change jobs. There are only so many companies that will let you work remotely. I guess it's fine if you're late career, but it would be a bad move for someone in their 20s, 30s, and maybe even 40s.

[aaron38]

Restricting supply really doesn't seem to be working out for SF.
Except for the landlords that is, which seems to be the whole point.

[subterranean]

Originally Posted by iheartthed

I think the trend is stabilizing a bit. It won't move completely back to 100% onsite, but I doubt we see significantly more workers convert into 100% remote.

But if you're working in a remote location that is far from a major jobs center, it seems like it would be much harder to change jobs. There are only so many companies that will let you work remotely. I guess it's fine if you're late career, but it would be a bad move for someone in their 20s, 30s, and maybe even 40s.

Probably in some fields, but not in others. My mom worked remotely for 20 of her 30 years as a medical transcriptionist in rural Michigan, most of that time for UC San Francisco. She has an associates degree and made west coast pay since the mid 90s when they set her up with a dial-up modem. But she had a ton of opportunities to work elsewhere.

[Khantilever]

The headline of the article is sensationalizing the findings, and the journal article itself is not much better. it’s strange to see this kind of editorializing in academic research.

Here’s a question: if low-income housing is so profitable, why isn’t there more of it?

The answer is that it isn’t that profitable in an economic sense. Market value of real estate is simply the present value of expected rent net of costs. So the higher observed net rents relative to market value, which is itself a function of those rents, must mean that there is greater uncertainty or risk associated with these properties.

Otherwise, if it were indeed the case that these properties are so incredibly profitable, their market value would be higher. This is why the “exploitation” interpretation is implausible.