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Public-ownership rental as a third option to renting or owning a house

theatlantic.com

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Re: Public-ownership rental as a third option to renting or owning a house

#111

Post by sokoloff »

jawns wrote: post #25

I'm a distributist, so I would prefer to see this type of system operated as a private cooperative, 100% owned by participants, rather than a government-run program. Why? Because then the people who get to make the decisions are the co-op participants themselves -- the people with the most skin in the game -- and the government can instead focus on areas where the participants actually need help, e.g. at the regulato…

Isn’t the fundamental problem that, in the starting condition, the potential participants can’t afford to buy property?

If they could afford to buy property to get started, it seems like it’s a different group of people than the article contemplates. Or perhaps I dramatically misunderstand your proposal.

Re: Public-ownership rental as a third option to renting or owning a house

#112

Post by eastWestMath »

dredmorbius wrote: post #47
larsiusprime wrote: post #18

How does this contrast with more old-school approaches to the housing crisis, like say, Georgism & Land Value Tax? There was a big review on Progress & Poverty over at Astral Codex Ten recently on the subject: https://astralcodexten.substack.com/p/your-book-review-progr... This proposal seems to address the same problem, but the mechanism is pretty different, and I'm wondering if it improves upon what the Georgists h…

I think you're on the nose here. The public ownership rental option goes nowhere without a capability to acquire (and retain) properties for the programme, and the ability to move unproductive or underproductive real estate into same. California's property tax situation (e.g., 1977's Proposition 13) makes this an all but unsolvable problem for that state. Short a countervailing proposition, a (state) constitutional a…

Banking seems like the best way to phrase this to prevent people from screaming about socialism.

Re: Public-ownership rental as a third option to renting or owning a house

#113

Post by imtringued »

celticninja wrote: post #105
don-code wrote: post #63

I didn't quite glean a thorough understanding of the model from the article. It sounds like it's: 1) Public funds provide capital to build a new dwelling; individuals move in at rates similar to market rent. 2) Rather than rents paying a landlord, rents act like principal payments on a personal mortgage - e.g. I own $10,000 worth of shares of the property after paying $1,000/mo for ten months. 3) Eventually, I own en…

When you sell the outstanding loan is paid off by the purchase price, the lender and owner take their respective share of the price

The new landlord would raise rents, because he has to get his money back somehow. It would be better to just let the government pay the full mortgage and pass on the costs for the first 30 years and then lower rents to rock bottom prices based on maintenance costs after it has been paid off.

Re: Public-ownership rental as a third option to renting or owning a house

#114

Post by dredmorbius »

fallingknife wrote: post #7

> A third option is necessary: a way to rent without making someone else rich. I care how much I pay. I don't give a shit who gets it.

Given the eventual concentrating of ownership, who gets it does matter in that it creates a land-ownership monopoly. Policies which discourage concentration of ownership, through land value taxation or public ownership, counter this tendency.

Re: Public-ownership rental as a third option to renting or owning a house

#115

Post by stevehawk »

Spivak wrote: post #101
MomoXenosaga wrote: post #89

Earlier quoted context omitted.

The housing market is FUBAR because the people who already have a house absolutely 100% need prices to go up indefinitely to fund their lifestyle. The government can't do anything either besides tell banks to lend starters more $ because the system cannot be allowed to collapse.

You say “fund their lifestyle” like people’s houses appreciating is paying for their summer home or m5 when in reality it’s funding their ability to move with work and not get their equity eaten by inflation. People need their houses to not deprecate and to roughly increase by value of the work put into the house during their time lived there.

i bet there's a lot of people refinancing their homes right now and rolling their car loans and other stupid stuff into the new mortgage by using the equity. i watched a lot of people do that in 2006-2008.

hell even i'm considering taking out a loan against my increase in equity from the last two years to buy a plane because interest rates are so low.

Re: Public-ownership rental as a third option to renting or owning a house

#116

Post by closeparen »

eulenteufel wrote: post #80
don-code wrote: post #63

I didn't quite glean a thorough understanding of the model from the article. It sounds like it's: 1) Public funds provide capital to build a new dwelling; individuals move in at rates similar to market rent. 2) Rather than rents paying a landlord, rents act like principal payments on a personal mortgage - e.g. I own $10,000 worth of shares of the property after paying $1,000/mo for ten months. 3) Eventually, I own en…

Thinking about the principles laid down in the article: a) Do not require significant initial funds for buying b) Do not have other people profit of the housing A simple solution congruent with these principles could be: Selling the house should be restricted to yield the amount of money you put in. This excludes money spend on repairs, etc., and is to be adjusted for inflation. You can keep living in the house as lo…

The interesting problems in a price cap system are about allocation. You’ve torn down one way of deciding who gets the house next. What do you replace it with?

Do the neighbors vote on their next neighbor? The city council? An impersonal bureaucracy? What factors does it consider? Are there priority quotas for people meeting certain criteria? What criteria? How many people? Who decides? Who decides if an individual meets the criteria? How do we keep them honest? Can their decisions be appealed, can normal people afford to appeal them?

I don’t think it’s impossible to come up with good answers here, but that’s the work. The mechanism design here is extremely important, and it’s not “simple.”

Re: Public-ownership rental as a third option to renting or owning a house

#117

Post by pdonis »

whimsicalism wrote: post #71
dragonwriter wrote: post #69

Earlier quoted context omitted.

> How is it a windfall for landlords? If the rent prices are going up, they will be making the money regardless of whether the renter is paying for it or the government is paying for some of it. Subsidies for a population that otherwise couldn’t afford it will accelerate the rate at which market price increases, especially since those subsidies will also increase as the market price does. It’s like student loans and…

> tudent loans and college prices, but worse. It's not worse if there is cost-sharing. And as I said above, > that is exactly what we want! A price signal to the market to build more housing to accommodate everyone who wants to live there including displaced communities! Inevitably, trying to keep displacement from happening is going to increase prices for newcomers. The question is whether we want to do that in a wa…

> A price signal to the market to build more housing

And, as basic economics will tell you, sending such a signal to a market is a windfall for people that already own the underlying asset in that market--i.e., landlords. They get a windfall because they bought the asset when the market undervalued it (because the price signal was not being sent).

Re: Public-ownership rental as a third option to renting or owning a house

#118

Post by almost_usual »

arcticbull wrote: post #30
airhead969 wrote: post #10

Isn't this what terrible public housing is already? Could it be less terrible or would it always devolve into a housing caste system because middle-/upper-classes would never use it? Set-asides for "affordable housing" in new developments are an absolute joke because there are very few units, they often have separate "servant-like" entrances, and may not be treated equally compared to other residents. Also, the root…

The root cause is way too little development relative to demand, orchestrated via zoning regulations. Wikipedia spells this out in detail for San Francisco [1]. > Since the 1960s, San Francisco and the surrounding Bay Area have enacted strict zoning regulations. Among other restrictions, San Francisco does not allow buildings over 40 feet tall in most of the city, and has passed laws making it easier for neighbors to…

San Francisco housing isn’t going to change until a natural forcing function like a large earthquake destroys a significant amount of the city.

The pandemic was a natural forcing function that brought rents down significantly.

Re: Public-ownership rental as a third option to renting or owning a house

#119

Post by Nasrudith »

seoaeu wrote: post #37
bennysomething wrote: post #6

"those losses aren’t equitably distributed, either: Nearly 2 million mortgages are underwater in the U.S., and they’re disproportionately concentrated in Black and Latino communities. Tenants in coastal cities, meanwhile, know the pain of forking over more and more rent every year, unable to save for a down payment and living at the mercy of sometimes unscrupulous landlords." What on earth does not equitable mean in…

> What on earth does not equitable mean in terms of distributing losses? That is literally explained in your quote. An inequitable distribution is one where a higher percentage of individuals in specific minority groups suffer losses compared to society as a whole.

That explains how it is disproportionate but not how the mechanism treats them unequally. Redlining for instance made minorities far less likely to obtain loans and thus kept otherwise qualified people from building equity.

Also distribution as unequal could be taken like taxes and a negative allocated to the unfortunate instead of the results forming the distribution.

Re: Public-ownership rental as a third option to renting or owning a house

#120

Post by sudosysgen »

don-code wrote: post #63

I didn't quite glean a thorough understanding of the model from the article. It sounds like it's: 1) Public funds provide capital to build a new dwelling; individuals move in at rates similar to market rent. 2) Rather than rents paying a landlord, rents act like principal payments on a personal mortgage - e.g. I own $10,000 worth of shares of the property after paying $1,000/mo for ten months. 3) Eventually, I own en…

Isn't this limited to one residence per person? So if you do sell it or rent it out, you still need another house, which you won't be able to obtain using this scheme.
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