Public-ownership rental as a third option to renting or owning a house • Hacker News Board

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

#211

Post by imgabe » Mon, Apr 19, 2021, 4:22 AM UTC

berdario wrote: post #14

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…

People cannot actually choose the location, without giving up their work. "You can only find work in a big metropolitan center that demands 60% of your salary in rent? Though luck..." Let's say that you work in London... if you are 1h away from your work, you're still likely in zone 3 or 4, which is pretty expensive. Your choices then are: a 1h30/2h commute (each way) or giving up on having a place only for yourself,…

There is usually more than one rental available withing commuting distance of a given job.

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

#212

Post by chii » Mon, Apr 19, 2021, 4:24 AM UTC

zhdc1 wrote: post #11

seibelj wrote: post #4

If this is such a good idea, why don’t they raise private funds from various charities and rich people to fund an experiment? Why am I as a taxpayer constantly asked to fund ever more schemes? This one has the all markings of a non-profit, and if you involve the government and associated bureaucracy it will become an entrenched quagmire like the huge housing projects that have been torn down in many cities. I don’t s…

Expanding on this, there are already similar schemes out there, and they've done nothing to stop property price inflation. Abstracting away ownership from the property to a collective legal entity ignores the main reason why people 'own' property in the first place - property needs to be actively maintained, and when it's not, those affected need to be able to identify and movitiate a responsible party. Even when you…

> ignores the main reason why people 'own' property in the first place

no, the main reason people own property is to extract profit from it (or extract utility - essentially the same thing). Maintenance is merely a hinderance that they put up with in order to maximize said utility/profit extraction.

If it were possible to create a property with no need for maintenance, the owners would opt for that!

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

#213

Post by willhoyle » Mon, Apr 19, 2021, 4:25 AM UTC

I’ve always been curious - what if we imposed a law disallowing owning more than 1 home. Wouldn’t this reduce demand and, in doing so, lower prices from less competition?

I’m sure there’s other aspects I’m missing which make this a bad idea but there’s something that doesn’t feel right about people owning 2-3 homes while others can’t get on the property ladder.

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

#214

Post by voidbip » Mon, Apr 19, 2021, 4:26 AM UTC

dragonwriter wrote: post #54

whimsicalism wrote: post #40

Earlier quoted context omitted.

I think there is still a place for government action to help prevent historic populations of a community from getting displaced. But those programs should be implemented as subsidies , not price controls! The only reason we're so reliant on the latter is it is more easy politically to put the costs on suppliers and hope the electorate doesn't notice that you're actually exacerbating the problem.

> But those programs should be implemented as subsidies, not price controls! Subsidies for historic populations without price controls would be a windfall for landlords, and an accelerant to runaway general unaffordability. You could probably split the difference with weaker rent controls and subsidies that make it look like stronger rent control from the renters side, which might mitigate the worst problems of eithe…

The supply of landlords is not fixed. If subsidies make it attractive for suppliers to offer housing, more housing will be built and the prices they can demand will fall. Subsidies naturally give rise to a glut and underconsumption which is exactly what you want.

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

#215

Post by sudosysgen » Mon, Apr 19, 2021, 4:27 AM UTC

InvertedRhodium wrote: post #176

sudosysgen wrote: post #98

Earlier quoted context omitted.

You don't make landlordism more expensive. You make it more difficult and less profitable. House prices will go down, and more people will be able to buy. For others, there is public-ownership rental and even public housing (that would be of much higher quality than today)

> You don't make landlordism more expensive. You make it more difficult and less profitable. How is that any different? If it's more difficult then it inherently consumes more time and/or money - given that money is (arguably) how we measure the value of labour I don't see any way of escaping this.

Not if you bound the profit. Then it consumes more time without yielding more money, and is thus less interesting of a proposition -> property values go down. You're assuming an equilibrium return on investment (and unchanging prices), and a perfectly stable market, here.

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

#216

Post by chii » Mon, Apr 19, 2021, 4:28 AM UTC

andrepd wrote: post #140

thesz wrote: post #106

This is an introduction of a discussion about removal of ownership of means of production, basically. This is a step towards socialism.

Yes, and that's great.

There hasn't been any historical precedence for which removing the means of production from being owned has turned out well. Because, either it has never been truly attempted - but just a thinly disguised usurpation of property by force, or that it failed and devolve back into ownership model anyway.

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

#217

Post by jtolmar » Mon, Apr 19, 2021, 4:31 AM UTC

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…

A similar program on a municipal level might look something like this:

1) Public funds provide capital to build or buy a dwelling. Public owns dwelling outright.

2) Individuals rent dwelling at market rate. Part of this money goes towards paying off inflation and the time value of money (equivalent to paying down mortgage interest), part goes to a fund in the individual's name (equivalent to paying down mortgage principal).

3a) Saved funds reach price paid for home. Ownership is transferred, public keeps the funds.

3b) Individuals leave early. The chunk of their payments that went to their fund is refunded.

The proposal in the article looks like it's much more ambitious, and designed as a national program. This allows the fund to follow the individual, instead of being tied to a property. Instead of having the refund/buy option, it always pays back a dividend. So if you've paid enough rent that you're getting $200/month back, and you move, you still just get $200/month back.

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

#218

Post by [deleted] » Mon, Apr 19, 2021, 4:54 AM UTC

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…

[deleted]

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

#219

Post by arcticbull » Mon, Apr 19, 2021, 6:43 AM UTC

lobotryas wrote: post #123

arcticbull wrote: post #30

Earlier quoted context omitted.

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…

The real root cause is that everyone wants to live (for obvious reasons) in places where housing supply is constrained like SF, LA, or NYC. Home ownership is easy in places like Detroit or Oklahoma boonies, but unsurprisingly no one wants to go there. Instead of cramming more people onto the same set of square mikes, how about we develop more (non coastal) places for people to aspire moving to instead? Not everyone h…

No, the issue is housing supply is arbitrarily and artificially constrained in these areas. It's vastly more efficient to simply concentrate housing and development in a small area rather than sprawling into undesirable areas.

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

#220

Post by rsj_hn » Mon, Apr 19, 2021, 6:50 AM UTC

Spooky23 wrote: post #175

rsj_hn wrote: post #170

Earlier quoted context omitted.

All these programs that subsidize the cost of borrowing merely drive up the price of houses. This is why things like the mortgage interest deduction or zero percent financing are not in the long term interests of home buyers when they are "scaled up", and when they are niche programs they are basically a convoluted form of charity. There is nothing wrong with that, some people like their charities to be convoluted an…

Not always. The program I described was really a way to transition folks into a sustainable lifestyle. Rents in this place are more than property values, so training to let working class people afford a home and rent the downstairs bring stability to the family and he neighborhood. Real estate is insane because we’re in an era where wealth is being shoveled into a few peoples hands, and we are literally printing mone…

I am not saying Habitat for Humanity (or any charity) is bad, nor am I trying to discourage anyone from giving to charity. I'm pointing out that what works in a small scale charity does not work for addressing social problems at scale, and in fact is often (more often than not) harmful when done at scale. This is because the specific things that charities are good at: giving stuff to small groups of people, is not really a path forward for problems faced by society as a whole, with the exception of the problem of poor people not having enough stuff. But when you try to use this approach for, say, housing policy, then you get bad outcomes.

We have had in this country a long term, bipartisan consensus that home ownership should be subsidized. The end result is transfers from renters to home-owners, record high homeownership rates, and many people buying homes because it's a way to make leveraged bets on asset prices at taxpayer expense. There are many people who have no business owning a home but who feel they must do so in order to not be left behind in this game of leveraged bets. The result is a toxic tangle of cross-subsidies between the real-estate and financial sectors and a whole army of various parasitical industries that has sprung up to feed on these subsidies -- everything from real estate brokers, title insurers, inspectors, appraisers, a virtual caravan of people lined up at the trough of our housing subsidies, all in the name of "helping the middle class" afford homes.

When you have such a terrible problem of mispricing and people chasing after windfall gains, the idea that the industry should be approached as a type of charity is really the last thing you want to do. If you want to give money to a poor person, then by all means do so, but that's not a path forward for national housing policy.