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Home ownership is the West’s biggest economic-policy mistake

economist.com

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Re: Home ownership is the West’s biggest economic-policy mistake

#101

Post by luckylion »

tpm wrote: post #61
Traster wrote: post #48

I don't think this article makes a logical argument at all. It says house ownership is bad because it gives people a vested interest in constraining the supply of housing. That's true but that's not a problem. If people didn't own houses then someone would, and that someone is still incentivized to constrain the supply. I'm also not sure that reducing home ownership is a good idea - "let's make everyone poorer" doesn…

"If people didn't own houses then someone would, and that someone is still incentivized to constrain the supply." that does not follow - if that someone does not want to sell them or make profit on the rent, why would he constrain the supply? "What's the actual alternative to people owning their own homes." The state, the city, not-for-profit entities owning them, for example. "I also take issue with this idea that w…

> if that someone does not want to sell them or make profit on the rent, why would he constrain the supply?

Why wouldn't that someone want to make a profit?

> The state, the city, not-for-profit entities owning them, for example.

That'd just make each individual eternally indebted to the state, at the whims of bureaucrats and vulnerable to political punishments while the costs wouldn't come down by much, because the state generally sucks at doing these things.

Re: Home ownership is the West’s biggest economic-policy mistake

#102

Post by bovine3dom »

brobdingnagians wrote: post #87
bovine3dom wrote: post #77

Earlier quoted context omitted.

> If people didn't own houses then someone would, and that someone is still incentivized to constrain the supply. Yes, but constraining the supply is done through political means: planning laws, green belts, individual objections to developments, voting etc. All of those in theory are based on "one man one vote", so if you concentrate ownership of supply you drastically reduce the number of votes it gets. > the middl…

Some people in Singapore may love their flats. Some of them might wish they could buy a house. People should be able to choose. People who love flats can live in flats, people who live detached homes can save up and buy or build one. It is odd that we have simply accepted that the government has the right to tell everyone if they can live in a flat or a house. I could think that arranged marriages are much better tha…

There are detached homes in Singapore - their price and taxes just reflect the fact that about a hundred people would normally be living on the same ground, and those people have to be compensated.

I think a fairer comparison in terms of relationships is like polygamy: forbidding people to live above or below you is a bit like taking away extra potential spouses. I believe polygamy is illegal in most societies due to the inequalities it causes.

Re: Home ownership is the West’s biggest economic-policy mistake

#103

Post by klodolph »

tejtm wrote: post #64
klodolph wrote: post #35

Earlier quoted context omitted.

Subsistence farming? That just means that most of what you farm is used to feed yourself and your family. It's not really that subsistence farming is inefficient, it's just that subsistence farmers (by definition) are not selling food on the market.

tenant farmer. share cropping; where the "farmer" is guaranteed to be left with nothing above subsistence if that.

That’s not subsistence farming. Subsistence farming is where you are only growing what you need, plus maybe a little extra. What you’re describing is something else entirely.

Re: Home ownership is the West’s biggest economic-policy mistake

#104

Post by Ekaros »

Traster wrote: post #48

I don't think this article makes a logical argument at all. It says house ownership is bad because it gives people a vested interest in constraining the supply of housing. That's true but that's not a problem. If people didn't own houses then someone would, and that someone is still incentivized to constrain the supply. I'm also not sure that reducing home ownership is a good idea - "let's make everyone poorer" doesn…

Harsh reality is that once a city reaches certain size option for semi/detached housing becomes unrealistic to house majority of population. Just numbers game.

Re: Home ownership is the West’s biggest economic-policy mistake

#105

Post by exporectomy »

dr_dshiv wrote: post #37

What if renters could have a way to pay more to gain partial ownership of their property? E.g., could progressively own up to 10%. That woulf allow for more of the feeling of ownership and allow renters to participate in the appreciation. That would mitigate some of the negative impacts of gentrification. Has anyone given this sort of renter-ownership blend a thought?

This exists in New Zealand. https://www.moneyhub.co.nz/rent-to-own-homes.html

Re: Home ownership is the West’s biggest economic-policy mistake

#106

Post by fogihujy »

lucian1900 wrote: post #58
fergie wrote: post #34

> a generation of young people who cannot easily afford to rent or buy and think capitalism has let them down Thats not some irrational misconception- capitalism has indeed let these people down. Capitalism, a set of social policies that prioritises the needs of capital over the needs of people, is literally a system that is designed to concentrate ownership. Under capitalism the best way to make money is to own, or…

I expected your last two paragraphs to argue for abolishing capitalism, after such a robust critique of its fundamental contradiction. Why not publicly owned and democratically controlled housing, like socialist countries have? I grew up in a flat where my parents paid less for rent to the state than for utilities.

In general, large public housing projects may seem very nice at first, but once the maintenance costs start going up (20-30 years later) it will become increasingly difficult for a publicly owned business to avoid increasing rent. Old buildings are simply quite expensive to maintain, especially when regulations require that buildings are occasionally renovated and brought in line with recent changes in regulations.

If you want to get around that then you need to subsidize some of those expenses using tax money, or simply use tax money to fund the renovations, and in most cases where such measures would be applicable it's simply not possible to divert resources that way, or there simply is no way to get a political consensus around such measures.

I lived in such a neighbourhood when I worked in Sweden about a decade ago. Publicly owned, low rents, great public transport, within walking/biking distance to the city centre, decent mix of people from various cultures, and a crime rate that was somewhat tolerable despite the relatively low average income.

Problem was, while the apartments were nice, the buildings' basements (incl. 1950's cold war fallout shelters), foundations, exteriors and the outdoor areas were in a pretty rough shape after 60 years, and the publicly owned business that owned the entire neighbourhood was desperate to sell it off to private developers, as they simply couldn't afford to maintain it any more. It was razed a few years after I moved out, and it's been replaced with privately owned luxury apartments.

Re: Home ownership is the West’s biggest economic-policy mistake

#107

Post by bovine3dom »

ahD5zae7 wrote: post #92
bovine3dom wrote: post #77

Earlier quoted context omitted.

> If people didn't own houses then someone would, and that someone is still incentivized to constrain the supply. Yes, but constraining the supply is done through political means: planning laws, green belts, individual objections to developments, voting etc. All of those in theory are based on "one man one vote", so if you concentrate ownership of supply you drastically reduce the number of votes it gets. > the middl…

> All of those in theory are based on "one man one vote", so if you concentrate ownership of supply you drastically reduce the number of votes it gets. Well let's not forget lobbying, corruption (more important than lobbying in some parts of the world, e.g. my country) and the plain and simple fact that politicians are usually quite rich (in many countries, not all) and so will own and rent houses, while having great…

That's why I added the "in theory" caveat : )

I still think a shift would matter. There is some evidence for this in the UK because homeowners generally vote Conservative, but people are becoming homeowners later in life and less often. So the Conservatives are running around terrified that they're going to lose voters in the long term.

They have introduced quite a few inflationary policies subsidising the first purchases young fairly wealthy people.

I think also the way they have pivoted more recently to focus on the "culture wars" and (English) nationalism is a way to encourage older renters to vote for them.

Re: Home ownership is the West’s biggest economic-policy mistake

#108

Post by pulse7 »

No no no... if you own a home you have a pension/rent for the time before your death... this is your stored money for those, who will take care for you before you die... before pension plans and insurance companies and financial markets existed, your home ownership was your "pension plan"...

Re: Home ownership is the West’s biggest economic-policy mistake

#109

Post by lentil_soup »

exporectomy wrote: post #89
lentil_soup wrote: post #29

Earlier quoted context omitted.

As a single data point, I live in one of the most dense european cities and home prices are insane. Probably a mix of speculation, tourism and other policies. While density might play a part it's not a silver bullet. As with everything, the solution is probably custom to each city and region

Perhaps it's not dense enough compared to how economically valuable living there is. Otherwise, why would people live in an overpriced city instead of a cheaper one? Why do you live there? Surely for most residents, it's because of high-paying jobs.

Most people live here because they are from here, local jobs are definitely not high paying.

Could they move to a cheaper city? Probably, but that has big life implications, people might take the economical hit to be able to stay close to home.

What I mean to say is that in this particular case it's not just a density problem. There's problems with tourism, there's problems with speculation, there's problems with general inequality. So the solution is not just build more, it's way more nuanced.

Re: Home ownership is the West’s biggest economic-policy mistake

#110

Post by tuyguntn »

by this economic model, if I get unemployed for unknown period, immediately I should become homeless? So this model pushes me always to have a job and work endlessly, because if I retire and don't have enough money to pay monthly rent, I should move to shittier place and live there (or become homeless)

feels like lobby article.

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