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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

#231

Post by chii »

chriswarbo wrote: post #150
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…

I think it's reasonable to argue against (such a heavy emphasis) on home ownership; but it has to apply equally. Everyone striving to own a home is a consistent scenario, which has pros and cons. Social housing that's owned by nobody/everybody is a consistent scenario, which has pros and cons. Having some paying rent to others who own (or, even worse, have buy-to-let mortgages), is inherently unjust.

> inherently unjust.

Why is it inherently unjust? The owner paid to have the building constructed. That took upfront capital. Asking the renter to pay for the use of this capital doesn't sound unjust to me.

Is renting out a car you purchased inherently unjust?

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

#232

Post by adrianb »

est31 wrote: post #59
DocTomoe wrote: post #50

Earlier quoted context omitted.

Seen from another angle, homeownership (once the mortgage has been paid) grants freedom, while a rent-dweller will remain a slave to his landlord forever, with Damocles's sword named "Eviction and homelessness" always dangling over their heads.

rent dwellers on the other hand can move whenever they want while home owners are chained to their property. Each time they sell and buy a new property they run a risk of buying lower quality than advertised, selling under value, and they do lose money in fees. Also, home ownership doesn't make you immune from gentrification due to property taxes. Especially if you "only" own a flat in a multi storey building, then y…

> home owners are chained to their property

As someone who moved across 4 countries in 10 years, I had the same opinion. Then I noticed that people who moved as often as me had no trouble to move out, rent their mortgaged apartment for more than monthly payments or sell it at a profit.

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

#233

Post by CaptArmchair »

rwmj wrote: post #206
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…

What's the reason for the strange difference between the tax on old and new houses?

Belgium has complex housing and zoning problems caused by 50 years of inconsistent policies and regulations.

One (of many) big issue(s) is that the past has seen unchecked claiming of land for new projects leading to an acute shortage of land, while lots of existing houses and buildings are entirely outdated.

We are talking about houses which are 60 or 70 years old typically located in densely pouplated urban agglomerations and haven't seen little to no remodeling whatsoever during that time. These are hardly isolated, difficult to heat, are entirely outdated in terms of utilities and plumbing and so on.

The idea behind the difference is to incentivize people to buy and renovate older, existing houses and curbing the further occupation / use of free & open space with new construction and urban sprawl.

It should be noted: Belgium is also a country with an incredibly complex fiscal system. There are taxes as well as tax breaks on every aspect of life. Belgium is a complex federal nation with many levels of government. To put that in perspective: it's a country with 6 different governments. All of which turn politics and policy making, unironically, into 5D chess. The fiscal system tends to be the arena where everything comes together, generally as a compromise which is often more founded on pragmatism then necessity.

Historically, home ownership has been, and still is, massively incentivized in Belgium. But just like everywhere else, soaring housing prices and an ageing population are causing issues for younger generations who can't buy property without financial help from their parents.

And so, young people find themselves in a bind. They can't just buy any property, market dynamics and public policies push them towards buying outdated property only to face long, drawn out and expensive renovation projects just to bring everything up to date with modern, strict construction codes.

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

#234

Post by bambax »

> Young people’s view that housing is out of reach helps explain their drift towards “millennial socialism”

And? Is socialism bad per se? Or is it just something that The Economist doesn't like?

> In Britain areas with stagnant housing markets were more likely to vote for Brexit in 2016

Ah but which is it? This comes just one sentence after the previous quote, making it seem brexitism is a variant of socialism. Is it?

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

#235

Post by daemin »

dbetteridge wrote: post #174
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…

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…

Also given that the median house prices are just below a million in Melbourne, and "slightly" above a million in Sydney, it makes saving up 20% for a deposit quite an endeavour. Then you need to account for all the other fees and stamp duty as well adding a few more percentage points of savings required.

The big problem in Australia is that nobody really in the government wants to do things to make houses more affordable. Anything that would immediately lower house prices would be a disaster for the political party and somewhat for the country. In fact the government has been doing all it can to keep house prices rising further and further.

First by adding a first-home-owners' grant, which just increased the prices of cheaper property, and most recently by allowing people to take money out of their retirement savings to buy a property. All this does is just add more fuel to the real estate market so prices would increase.

The only real way to lower prices would be for a genuine crash to happen, one where the government would be incapable of doing anything to prevent. The other would be to get rid of negative gearing, maybe just for existing property initially, so that people won't leverage up the eyeballs buying more and more investment properties.

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

#236

Post by timbit42 »

EVa5I7bHFq9mnYK wrote: post #217

So why people flock to those high priced cities? Past year has shown you can work remotely alright. Is it just the restaurants?

Many employers weren't convinced of remote work. The pandemic has changed this so I expect to see an effect. Also, rural areas often don't have very good internet for remote work, so moving toward cities helps.

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

#237

Post by kwhitefoot »

KptMarchewa wrote: post #229
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…

> the middle class who used to be able to live in a nice semi/detatched house are now living in flats in a skyscraper that is a massive detriment to their quality of life Having to own a car, maintain lawns/garden or pay someone for it, and having to commute for hour one side instead of 15 minute walk would be an extreme detriment to my quality of life.

It's good that you have the choice to rent and I and the other commenter have the choice to buy.

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

#239

Post by AlgorithmicTime »

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,…

It's not the "being with your children" aspect so much as it's the "being with your children while simultaneously guiding them through a remote education experience no one was prepared for and working remotely at a job that was formerly in person in an office."

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

#240

Post by effie »

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…

What is "financial freedom"? You still have to work, use state currency, pay taxes. Did you mean owning your own home is the first step towards being wealthy?
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