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Basic income plan clearly rejected by Swiss voters

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Re: Basic income plan clearly rejected by Swiss voters

#511

Post by bane »

Sophistifunk wrote: post #499
bane wrote: post #356

Earlier quoted context omitted.

All of those costs are simply amortized over the rental agreement. I'm not sure why people who rent seem to think landlords are appliance/maintenance charities.

Not at all. Rental costs are most strongly influenced by supply-and-demand of housing, whereas sale costs are mostly influenced by supply-and-demand of credit.

Not true, rental costs will go as high as possible until buying becomes more attractive. Buying costs are based on supply and demand of housing and credit. That's why it's more expensive to buy a house in San Francisco than in Kansas City, Missouri even if the credit markets are effectively the same in both cases.

Under normal market conditions, borrowing money becomes expensive as monetary supply decreases. However, very active central banking systems the last couple decades has changed the story on this.

Re: Basic income plan clearly rejected by Swiss voters

#512

Post by andrewjl »

areyoucrazy wrote: post #53
_nalply wrote: post #7

Earlier quoted context omitted.

The downside are populistic decisions like the Swiss minaret referendum. Now we have the sentence «The construction of minarets is prohibited.» in the constitution. ( https://www.admin.ch/opc/en/classified-compilation/19995395/... ) I think such regulations should be decreed as a law and not as a constitution norm if at all. But if everybody has a say you get bikeshedding in the constitution.

The downside are populistic decisions like the Swiss minaret referendum... Oh, you liberals. You hide behind democracy when, in fact, you are a bunch of tyrants who would like to jam your ideas of immigration, multiculturalism, socialism etc. down the people's throats whether they like it or not. Why are you labeling direct democratic decision by majority of people as bad/downside? It seems that when people do someth…

“A democracy is two wolves and a lamb voting on what to have for lunch.” - Gary Strand

A free for all democracy is no different from tyranny by the majority.

Re: Basic income plan clearly rejected by Swiss voters

#514

Post by nemo44x »

seanp2k2 wrote: post #429
nemo44x wrote: post #366

Earlier quoted context omitted.

I was waiting for someone to mention that. Home ownership is expensive and makes you inflexible. Also, consider property taxes (which will scale with inflation) and the fact home owners insurance is more expensive than renters. And besides finance you need to consider if you want the responsibility of owning a home. Cutting the grass, shoveling snow, cleaning gutters, fixing things, painting, etc. It's a lot of work.…

Another counter-point: when you buy a house, even while the mortgage isn't paid off, you can immediately start renting parts of it and end up in a situation where your mortgage payments are equaled or exceeded by your rental income. I also believe that this is taxed differently from normal income, especially so if you're renting rooms in a house you live in vs. owning rental property. In the Bay Area at least, a sing…

I think it's important to not conflate being a landlord (investment and business) with buying a home to live in.

The Bay Area is but a single market and not representative of all markets. There are many more markets that haven't seen similar growth. The Bat Area is the exception.

If you are paying off a home and you lose your job, if you've leveraged yourself like many home buyers have then you might lose your home! Especially if you lose your job because the economy tanked and home prices have ranked leaving you underwater owing more than the home is worth. And then the bank takes the home back and your entire investment is wiped out. Look to 2009 for an example of this. And rents dropped significantly at that time.

The opportunity cost of tying up a solid down payment needs to be considered too. 200k down could be used in other places too.

I think most people who buy with 20% or less down don't understand how leveraged and dangerous their position is.

Lastly if buying a home was a good way to get rich then we'd have a whole lot more wealthy people.

It's not a bad thing at all and for certain people in certain positions it's a good thing. If you can buy with cash and have at least 40% of your bankroll left afterwards then yeah it makes sense. If you plan on staying in a place forever (laying down roots) and can afford 30% down and still have 2 years of mortgage payments in a cash savings account it makes sense.

I feel like a lot of people buy homes because they just think that's what you do. A home has meaning to a lot of people. But the opportunity costs and risks are large and the rewards are generally a wash with renting long term in most markets with the exception of places that get a 30 year boom or other rare real estate lottery scenarios.

There are ways to win but 10% down and a 30 year mortgage is rarely it.

Re: Basic income plan clearly rejected by Swiss voters

#515

Post by bane »

soyiuz wrote: post #446
bane wrote: post #316

Earlier quoted context omitted.

To make your plan work, you'd have to have around $1mil in investment dollars that you'd place into various investments to make the "free" rent money. Since you're relying on those investments to provide shelter, they're just as illiquid as owning property (except with property you can make money off of it). The best plan here is to keep $800k in investments, move to rural nowhere and buy a huge house for $200k cash…

The amount is irrelevant, since you are making the same percentage on whatever sum investment. I think you are using a non-technical definition of liquidity: I can convert ETFs or stocks into cash almost immediately. So for example, it is easy to scale down or to move money from stocks to bonds. The house is immovable property in all senses of the word. It is difficult to convert to cash or to move (in case of politi…

To make your original scheme work (investment earnings pay for rental costs), you investments are de facto illiquid, otherwise you have no way to pay for housing without breaking from the scheme. You also need to make more from your investments than renting currently costs because over time rental prices are likely to go up and your investment return will need to increase.

You are right that property ownership is more illiquid, but supposing I had a million dollars invested making me a better than 4.5% return, why would I pay rent when I could just buy a house with that money instead? At the end of the mortgage period I'd have my original investment plus ownership of real property, while the renter would only have their investment dollars and would have to continue the investment-for-housing scheme for the rest of their life.

> First, given a neutral market,

This is a false assumption as markets are almost never neutral. It's impossible to be a market oracle, but historic trends show a general upwards movement in most well functioning economies. It's a better than chance bet that most markets are thus net positive. You are correct though that nothing guarantees this upward trend.

The New York Times calculator is pretty good, but misses the simple fact that you need to live somewhere forever and not just for the period of a mortgage. Thus any comparison should be made with how long you expect to live.

The picture is very clear, you will likely need housing longer than 10-15 years, and if that's true, then buying property nearly always wins over renting.

Re: Basic income plan clearly rejected by Swiss voters

#516

Post by bane »

_9MOTHER9HORSE wrote: post #407
bane wrote: post #356

Earlier quoted context omitted.

All of those costs are simply amortized over the rental agreement. I'm not sure why people who rent seem to think landlords are appliance/maintenance charities.

Not necessarily. When the capital gains from simply sitting on a property are so great, I'm sure a lot of landlords are actually making a net loss on a renting operation, and don't care all that much. Regardless, the point is that a lot of people see the mortgage repayments equalling the rent and don't think about the extra costs of ownership.

Landlords don't have infinite cash reserves. They still need to cover costs or minimize losses if they're betting on capital gains from property sale at some later date. Most renters pay for the maintenance and taxes of the property they live in, it's just not itemized for them and the costs are generally amortized and distributed among multiple tenants. Landlords are generally not charities, if you got lucky enough to find one who is, be very thankful.

You are correct that rent != mortgage and shouldn't be compared too close. Renting is a 100% loss, while mortgage is After the mortgage is paid off, the renter still continues to loose 100% of their housing costs while the owner has only care and maintenance (and taxes) of the property to account for.

Re: Basic income plan clearly rejected by Swiss voters

#517

Post by dionidium »

tptacek wrote: post #506
dionidium wrote: post #500

Earlier quoted context omitted.

People have been moving out of the urban core in U.S. cities for the last 50 years. This has hit mid-sized U.S. cities particularly hard. While enough businesses may have stayed behind to maintain a central business district, the residents chose to live elsewhere and commute in. The St. Louis region, where I live, has nearly 3 million people (about half of which are inside the I-270/255 loop, for some context on a ma…

"Urban core" has little to do with it. "The loop" in central downtown Chicago hosts pretty much nothing but large office buildings. It's dead after 6PM because nobody is there. Where are they? Other parts of the urban core of Chicago.

Sorry. "Urban core" is ill-defined enough to be almost meaningless and I was using it alternately to mean Downtown and to mean it in the sense you do, which was bound to cause confusion. I was trying to point out that the St. Louis Downtown isn't even dense by the standards of other places in its urban core (in the sense you mean).

That's my fault.

Re: Basic income plan clearly rejected by Swiss voters

#518

Post by notaregular »

s3nnyy wrote: post #37

Switzerland is the only country in the world that implements direct democracy. You can really feel the difference to the rest of Europe. Swiss more often than not stand behind decisions made by their government. When talking about their politicians, the Swiss say "WE decided that ..." whereas e.g., Germans say: "THEY decided that ..." If you look for a coding job in Europe, Zurich is a great place to live and is the…

> You can expect to get 7000 - 12000 CHF / month after taxes

I get barely 6000 after taxes after working here for almost three years. I'm not Zürich area, but still. Out of curiosity, in which branch are you?

Re: Basic income plan clearly rejected by Swiss voters

#519

Post by nemo44x »

sosborn wrote: post #399
nemo44x wrote: post #366

Earlier quoted context omitted.

I was waiting for someone to mention that. Home ownership is expensive and makes you inflexible. Also, consider property taxes (which will scale with inflation) and the fact home owners insurance is more expensive than renters. And besides finance you need to consider if you want the responsibility of owning a home. Cutting the grass, shoveling snow, cleaning gutters, fixing things, painting, etc. It's a lot of work.…

Taking care of the building is actually a lot of fun for some people!

No doubt and didn't mean that as a slight to people who take pleasure in maintaining their property. In fact I admire lovely landscaping and can see myself wanting to do that one day perhaps.
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