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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

#131

Post by adav »

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?

In the UK that exists and is called “Shared Ownership”. Some local councils often stipulate some units shared (or key-worker affordable) are a percentage of units built in every development.

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

#132

Post by em-bee »

radicalbyte wrote: post #57
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…

It would make so much more sense to just implement a progressive wealth tax combined with tax rules which make owning more than one home very expensive. I would also be interested to see what would happen if the rental and sales markets were forced to only supply houses which matched the current building codes - it would make building much more competitive.

now that would be interesting. if an old flat or house became unrentable or unsellable once the current occupant moves out because it doesn't match current requirements, then landlords would be begging renters to stay.

on the other hand, individual home owners would be stuck unable to sell their property, because it would drop in value. (even if they could sell it, not everyone would want to buy it). i am not sure if that's good or bad.

in any case everyone would be forced to keep their buildings up to standard.

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

#133

Post by agent008t »

rocqua wrote: post #15
Animats wrote: post #4

What's this obsession with increasing housing density? Population in the developing world is leveling off. Most of the developed world is already at "peak child".[1] Housing shortages come from migration to cities, not more people. [1] https://ourworldindata.org/peak-child

The rules against density have prevented a lot of demand from being met. It makes big cities where people want to live unattainable for many because of price. It also forces many people into long commutes. This makes them less happy, cause large amounts of pollution, and creates huge traffic jams. By increasing density, biking to work becomes easier. Similarly, public transport becomes a lot more effective. In genera…

Am I missing something or is the solution fairly obvious?

Anyone who can work remotely should be encouraged to do so. And that is a lot of office workers. People should be encouraged to move to cheaper towns and work from coworking spaces (or from home). Services will follow (cafes, hairdressers). This will lead to more equal development of a country and decongest the cities.

Instead, at least in the UK, the government is completely squandering this unique opportunity. They seem eager to force us back into the pre-pandemic life patterns. Why? If people don't like the high street anymore, so what? The economy exists to serve the people, not the other way round.

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

#134

Post by maccard »

inglor_cz wrote: post #75
Mengkudulangsat wrote: post #70

Earlier quoted context omitted.

I'm a millennial and I plan to rent forever because I value the ability to move out whenever I liked. Even homeowners can't escape that sword of Damocles you describe. IMO as long as you have assets (stocks, cash, etc.) that you can periodically liquidate to cover expenses, the form of those assets doesn't matter.

I am a GenXer and after some time I got tired of obnoxious landlords. Plus, after living in 12 different places and not knowing when the next "please move out, I need this apartment for other purposes" note comes, is sorta stressful. Every coin has two sides. I can imagine that expensive real property may be a burden that prevents you from living fully. I can also imagine having a house as an anchor in a place I love…

> Plus, after living in 12 different places and not knowing when the next "please move out, I need this apartment for other purposes" note comes, is sorta stressful.

It doesn't have to be like this though. This is fundamentally an issue with renters rights, not with renting itself. I rented for 10 years and received none of those letters, and in my close circle of friends I only know of one situation where the landlord asked them to leave in that same time period. The only reason I bought was because I couldn't find a rental that would allow a dog.

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

#135

Post by maratc »

lucian1900 wrote: post #121
maratc wrote: post #113

Earlier quoted context omitted.

> like socialist countries have? What socialist countries have it? Are there any?

In my parents' case, it was România before '89. Thankfully they were lucky to be able to buy their flat in the early 90s, but those of us that rent today aren't so lucky. Rents consist of the majority of one's income, like in all liberal countries. The remaining socialist countries are China, Vietnam, Cuba, the DPRK and Laos. Venezuela and Bolivia are struggling towards it as well. All of them have varying but signif…

The "privatization" in the '90s was a one-off where failed socialist states just passed the bulk of state-owned flats to its inhabitants for a symbolic sum, on their way to becoming capitalist states. There wasn't any "market" to speak of, so no market prices.

This can hardly be seen as an example-setting experiment, as socialism only works when there is something or somebody to pay up the costs. In the case of the USSR, it was its oil and gas exports. In the case of Romania, it was the USSR for the most part.

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

#136

Post by Supernaut »

CalRobert wrote: post #100
pjc50 wrote: post #84

Earlier quoted context omitted.

> as long as you have assets (stocks, cash, etc.) that you can periodically liquidate to cover expenses "I don't care because I have a trust fund" is not the argument you think it is. If you're talking about accumulating wealth, I note that (in the UK at least) the gain you can make without incurring tax is somewhat limited but the house that you're living in has unlimited exemption from capital gains tax.

Similarly in Ireland, it's crazy that people here wonder why homes are so expensive when we have an asset class free of CGT where ownership gives you a right to object to the creation of any more supply of said asset. What a deal!

I take it you're referring to people objecting to applications for planning permission? You don't have to own your own home to do that. You don't even have to live in the area affected by the proposed structure. And it's also entirely possible that the authorities will dismiss your objection out of hand.

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

#137

Post by bserge »

pessimizer wrote: post #60
bserge wrote: post #44

Earlier quoted context omitted.

That's what the government is for. Regulate on behalf of the majority. Sadly, that seems to be evolving backwards, from practice to theory.

Government is for regulating on the behalf of everyone, not just a majority.

They can't really do things for everyone. There's always going to be a conflict of interest between different groups, like homeowners vs those who don't own a home. The minorities are only listened to when it doesn't affect the majority in a significant way.

But I have to apologize, I've mistakenly assumed non-homeowners are the majority, when in fact it's the opposite in most western countries. So the government is doing their job in this case.

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

#138

Post by rvalue »

RcouF1uZ4gsC wrote: post #73
tlarkworthy wrote: post #68

Next up, living in families shown to be inefficient, newborns should be matched in a skills based auction at birth. => There is more to life than supply and demand, and home ownership has a hidden effect on societal responsibility, wellbeing and a life milestone

Actually who you are born to is probably the number 1 driver of inequality. If you really wanted something more equitable, you would probably require that no children be raised by their parents and be turned over to a state run children's home at birth.

No

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

#139

Post by teachingassist »

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.

This seems theoretically nice but is not in practice the case. Homeowners are immediately present, voting locally, political NIMBYs.

Homeowners who are ostensibly in favour of increasing the housing supply, still don't like it when it affects their own area (and know how to effectively campaign against it locally).

Landlords just don't care that much (in this instance) - an increasing local population heralds local economic growth and a potentially increased value of their property portfolio.

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

#140

Post by RobertoG »

yrgulation wrote: post #78

Property ownership is bad. Rent for life, dont leave inheritance to your children so they can rent for life too. All you need in life is clothing, entertainment, a bit of travel to distract you from your tiny living space, maybe a gadget or two and of course onsite work. Oh and praise from you manager to add meaning to your daily grind. Or so “they” say while “they” amass thousands of properties and massive fortunes…

>>"Owning your own home is, in my view, the first step towards financial freedom."

I totally agree. It's obvious to me that home ownership is what allows the existence of a "middle class". That makes it a target for some interests.

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