Comment by ChuckNorris89 | Hacker News Reader

Comment by ChuckNorris89 | Hacker News Reader

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>How does it benefit local Mexicans?

Let me flip the script on you. How did rich Arabs, Asians and Russians buying US, London, Vancouver, etc. realestate benefit the average American/local? How much of their investment money ended up in the Average Joe's pocket? How much was his life improved from that added money? If you answer me this, I will eat my own hair.

I'm tired of this trope that real estate economic colonialism somehow benefits the locals so much, they should be damn grateful they're being priced out of their own countries/cities by richer foreigners because "they're spending their money here instead of back home".

No! You can try to spin it as some benevolent trickle down economics, but it only benefits the asset owning/rent seeking class and the middle men who make a living by taking a cut on real estate deals (banks, building developers, realtors, lawyers, notaries, etc.), basically those wo are already in the top 10%, if not even higher. The rest, mostly get shafted, as that's where the trickle down ends and the only effect they will experience is housing becoming even more unaffordable for them.

As much as you want to think you're helping, it doesn't improve the country at large, it just increases inequality. The rich get richer, while the poor will be poorer.

Otherwise Thailand, Vietnam and other expat enclaves for Westerners would be out of poverty by now. But that's not how this works. You don't get a poor country out of poverty by housing rich foreigners.

Also applies to the small mountain towns of the American West. Having all that billionaire money buying ranches does inject a small bump into the local construction/food/services economy at the cost of affordability for the workers themselves. Locals eventually get priced out.

I think there is an equalization effect there. Billionaire buys property on rural ranch instead of in the city, that leaves more room for people (possibly even people fleeing ranch life) to better afford the city billionaire could have bought property in.

The economic benefit is only realized when the international buyers of the property actually live in the country they buy into. Their presence in the country allows more businesses to prop up, creating jobs and a higher standard of living.

The reason why Russian and Asian wealth hasn't been great for America is because America allows investment but not residence but other countries are allowing both.

Does it though? A few years ago, google opened an office in a relatively boring area of my small city, which is on the border of an area with a lot of low-income residents. Now, that place is full of nice restaurants and super expensive high rise apartment buildings. It's a nice place now.

But you know who I never ever see there anymore? The people that were living there before google came!

If they owned their homes that’s because they cashed out. If not then sorry, a chance of displacement is a part of renting, so you gotta live with it.

Also: Build more housing - zoning delenda est.

> If not then sorry, a chance of displacement is a part of renting, so you gotta live with it.

But you understand that these people are renting because they have no other choice, right? And I don't think "they cashed out" is the only explanation - there's also the possibility that they could no longer pay their property taxes.

Your comment comes across as extremely tone deaf to the reality that a lot of people will always have to rent because they cannot afford to buy, because the only new things that get built are extremely expensive "luxury" apartment buildings.

This will continue as long as rising property values is seen as a good thing. That’s why local governments promote price growth through land-use regulations.

> But you understand that these people are renting because they have no other choice, right?

That doesn't change the fact that renting is, by definition, non-permanent while ownership is permanent.

What do you suggest as an alternative? That all ownership be done away with? That a special exception for ownership of things be made if the thing in question is land or houses? That ownership of things that is either land or houses be limited? Taxed higher?

Government protecting the right to own things is the basis of civilisation.

Residential renters have their own protections too, in many places, allowing for renters to sometimes live for extended periods rent-free. There are limits on the rental adjustments, limits on evictions, etc.

A solution could be to encourage more housing to be built. Another one is to encourage economic development in other areas, so renters can move to other areas where they can afford to buy.

Insisting that people should not have to move and should be able to purchase their own home where they are, AND if they want to rent, then they never have to move again is simply unreasonable and ridiculous.

> But you know who I never ever see there anymore? The people that were living there before google came!

Who exactly is working in said restaurants?

Also, what do you think low income people do once they get a higher income? Could they move out somewhere for a better life for themselves?

If you are unhappy about not being able to see poor people but the poor people are happy about exiting their previous way of life, that's not an economic problem. It's just a you problem.

Of course it's a good thing if people are able to move up and do better economically. But it seems like a huge stretch to assume that's what happens to existing residents when gentrification happens.

That's because gentrification in America displaces lower income but gentrification in developing countries is more mixed and brings growth. Make some restaurants near a poor area in Mexico, the poor are happy to earn and not have travel 30 miles for work. 5 years in, they will leave to a cheap suburb or rural area.

I suppose the difference is if the person actually lives in and contributes to the community or not.

Many properties bought by Asians and Russians in tier 1 western cities (London and Toronto are the obvious examples) are not even lived in; they are simply places to store wealth since the home regime isn't trusted.

And what exactly would be the added benefit to the locals if those millionaires would actually live there?

That now there are consumers in the area willing to spend $10 on a latte instead of the usual $2?

Congrats. Now local consumer prices will increase even more.

How is this any different when some rich tech bro from CA cashes out and buys acreage and a McMansion an hour out of Dallas or some stock broker does the same in Florida?

Because it's Americans doing stuff in America, where everyone has, in theory, the same economic opportunities so they can do what they want with their money independent from their state. It's the same country.

It's where they live, make their money and pay their taxes so they're free to spend it there as they please, so the housing and societal issues high earners cause stays internal instead of exporting it to others countries with lower purchasing power where the locals have fewer economic opportunities than Americans.

People from Florida can also easily go and work top paying jobs in CA, while foreigners outside of the US can't just walz in and get high paying CA jobs whenever they want due to visa issues and other barriers put in place. That's the difference.

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