Home ownership is the West’s biggest economic-policy mistake • Hacker News Board

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

#191

Post by dbetteridge » Tue, Apr 20, 2021, 11:08 AM UTC

elric wrote: post #182

dbetteridge wrote: post #174

Earlier quoted context omitted.

I mean the article agrees with you? It primarily talks about the unfairness of the current system, the NIMBY problem reducing housing stock and the issue of regulations intended to curb new building reducing the stock of houses so that only the elite and existing homeowners can afford them. The section on renting/alternatives is mainly just a discussion about alternatives to the current unfair approach and some cases…

> a minimum 5% deposit + 3-5% stamp duty Oh wow. I had to read the rest of your comment twice to understand that you were saying these seem high to you. They seemed really low to me. To put it into perspective, you need a 10-20% deposit in Belgium (depending on various factors) and there's a 6% tax for an old house (10% up until very recently) or 21% for a new house. It's basically impossible to buy a house if you're…

Yeah sorry poor wording on my part, as a percentage it is low but as a percentage of income it is pretty high.

A 20% deposit is minimum to not have to pay a 'Mortgage insurance' which gets added to your mortgage to cover the bank if you default.

Belgium sounds like an even more painful situation, sucks for those of us who would just like to have a stable place to live and be allowed to add some personal character to (not allowed in most rentals ive lived in)

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

#192

Post by dbetteridge » Tue, Apr 20, 2021, 11:09 AM UTC

pc86 wrote: post #190

elric wrote: post #182

Earlier quoted context omitted.

> a minimum 5% deposit + 3-5% stamp duty Oh wow. I had to read the rest of your comment twice to understand that you were saying these seem high to you. They seemed really low to me. To put it into perspective, you need a 10-20% deposit in Belgium (depending on various factors) and there's a 6% tax for an old house (10% up until very recently) or 21% for a new house. It's basically impossible to buy a house if you're…

Is that tax added into the mortgage as a lump sum (meaning you pay interest on it for the life of the loan) or is it added to the payment each month?

Not sure how Belgiums works, but Australias stamp duty is a lump sum you pay alongside your deposit when buying the property.

Correction: I double checked and it looks like it can be added to your mortgage, which isn't as bad up front.

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

#193

Post by pc86 » Tue, Apr 20, 2021, 11:11 AM UTC

yosito wrote: post #173

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 don't disagree with you, but owning your own home can also be a step towards financial ruin if you choose the wrong home. I know a few people who bought homes that they ended up losing huge amounts of money on and selling a few years later. Beyond that, it's also a commitment that comes with a huge opportunity cost. If I buy I house in…

> and selling a few years later

That might be part of the problem? It's extremely rare to make a profit selling a home less than 5 years after you bought it even in good-but-not-insane markets. Basically unheard of in under 3 years in not-insane markets. If the market slips you're easily looking at 7-8 years to break even. The math of a six-figure, three-decade loan just doesn't support quick flips even just to break even, and most people are way too proud to sell something for break even 5 years after they bought. Add in maintenance and it's easy to see how if you let that slip you can be on the losing end of a sale even 5-6 years later.

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

#194

Post by luckylion » Tue, Apr 20, 2021, 11:13 AM UTC

tpm wrote: post #171

luckylion wrote: post #160

Earlier quoted context omitted.

> The city started this program at the beginning of the 20th century when 300'000 people didn't have a place to live - it's obviously much better now. So maybe it's not a completely broken way of doing things? Hard to say. How would Vienna look, and how many people would be able to live there at what cost if it hadn't? I'm absolutely not opposed to the state getting involved when there's a crisis, or the investments…

> But generally, the bureaucracy is large, the inefficiency and corruption runs rampant, the quality is subpar and they're constantly at risk to be sold off when the next mayor wants to spend money on a new air port or some policy their voters like. I completely believe all of that. It's still much better than here in Slovakia where public housing is pretty much nonexistent, most people own their flat/house outright…

Wouldn't the state have to acquire the land and keep up with building codes as well?

Cooperatives are member-owned, so essentially you + 100 other people would get together, each put up a bit of money, get a loan from the bank, and build a house for all of you to live in. They're not-for-profit entities, they exist to apartments to their members. But they're explicitly not the state, so they're not a tool being (ab)used by politicians.

> So I think interests would be better aligned if the state decided it wants to really support building new housing instead of only paying lip service to it.

I agree, but I believe that would only be temporary, and as soon as they no longer accidentally align, you'd be in a tough spot. This is different in a cooperative entity, where renters = owners.

Why aren't more rentals being created in Slovakia? Just because of social stigma of not owning?

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

#195

Post by bovine3dom » Tue, Apr 20, 2021, 11:14 AM UTC

coldtea wrote: post #145

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. I guess they couldn't state it openly, e.g. like: "Let's bypass democratic majority rule, by taking away something people vote to protect - and not just anything, but their homes -, and consolidating its ownership to fewer rich property moguls and conglomerates" Becau…

> Let's bypass democratic majority rule,

The trouble is that it is only a local majority. There are a larger number of people who would like to live in high-demand areas, but they can't vote to make that possible because they don't live there.

> by taking away something people vote to protect - and not just anything, but their homes -,

No-one is suggesting taking away their homes. Just making it more uneconomical to sit on land that has been improved by the state and profit from the ensuing increase in value. I personally would advocate for making these changes to the tax system very slowly, perhaps over the course of 20 years or so.

> and consolidating its ownership to fewer rich property moguls and conglomerates

They don't necessarily have to be rich. I personally wouldn't ever invest in a property conglomerate - they're far too unprofitable and buffeted by political winds. Software is where the money is at, but if you're on this website you already know that.

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

#196

Post by luckylion » Tue, Apr 20, 2021, 11:16 AM UTC

teachingassist wrote: post #177

luckylion wrote: post #101

Earlier quoted context omitted.

> 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…

> the state generally sucks at doing these things. Most European states do a great job of this - the suck part comes (like in the UK), when the state stops supporting this and a generation of people are left without decent housing options.

I live in Germany, and I can assure you, the state does not do a great job in this regard. I don't know about France, but seeing the satellite cities surrounding Paris, I have some doubts. Where are they doing a great job in Europe?

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

#197

Post by scambier » Tue, Apr 20, 2021, 11:16 AM UTC

sufehmi wrote: post #91

bovine3dom wrote: post #82

Earlier quoted context omitted.

In practice, that's not so far from what schools do.

Yup, COVID-19 shows me something that I have suspected all along - a LOT of parents are not comfortable to be with their OWN children. Because schools are closed, parents have to be with their children all the time A lot of them are really, really stressed out because of this. Which begs the question - why the fuck did you bother to have kids then? Children are blessings from heaven. If they can not see it that way,…

I, the perfect dad, absolutely 100% expected that my children would have to stay confined in our house 24/7 with no school, no outside activity (and I'm fortunate enough to have a small lawn), practically no outside contact, all while having to do my job and do my best to raise and keep them occupied.

Also, I'm absolutely not worried about their own well-being, or lack of social interactions, or even the constant loss of bearings, or if they themselves worry about how their parents are doing.

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

#198

Post by tuukkah » Tue, Apr 20, 2021, 11:21 AM UTC

elric wrote: post #182

dbetteridge wrote: post #174

Earlier quoted context omitted.

I mean the article agrees with you? It primarily talks about the unfairness of the current system, the NIMBY problem reducing housing stock and the issue of regulations intended to curb new building reducing the stock of houses so that only the elite and existing homeowners can afford them. The section on renting/alternatives is mainly just a discussion about alternatives to the current unfair approach and some cases…

> a minimum 5% deposit + 3-5% stamp duty Oh wow. I had to read the rest of your comment twice to understand that you were saying these seem high to you. They seemed really low to me. To put it into perspective, you need a 10-20% deposit in Belgium (depending on various factors) and there's a 6% tax for an old house (10% up until very recently) or 21% for a new house. It's basically impossible to buy a house if you're…

In comparison, in Finland the stamp duty is 0% when you buy your first home while you are under 40.

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

#199

Post by username90 » Tue, Apr 20, 2021, 11:21 AM UTC

cryptica wrote: post #179

The system is so heavily manipulated. I don't trust statistics anymore. I remember reading a statistic that only 35% of wealth is inherited... The way I read this now is that 35% of wealth is inherited via a will after a parent's death and 64.9% is inherited via some kind of money laundering or power laundering financial scheme while the parents are alive... Leaving only 0.1% to real, self-made individuals.

Making up imaginary facts to deal with data you don't like makes you a conspiracy theorist.

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

#200

Post by gtsop » Tue, Apr 20, 2021, 11:23 AM UTC

Most of my relatives have moved from owning their property to renting. The rents go higher and higher, leading people to rent worse and worse houses so they can aford to live. Those who still manage to own their home have a significant advantage in life.

West's biggest economic-policy mistake isn't home ownership, but capitalistic use of housing. Give me a 100% guarantee that I will get afordable, good quality housing for life and I will have the keys of my house delivered to you tomorrow, first class shipping, free of charge. Can you ever make this guarantee in a capitalist economy? No? Well, I'll pass then, I'll keep my own house. Bye