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

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

#271

Post by neilparikh » Tue, Apr 20, 2021, 12:56 PM UTC

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…

Your comment is a massive strawman of the article.

The core problem is that once you have a majority of the population owning an asset, they're incentivized to pull the ladder up behind them, and make it difficult for the non-landed to also buy the asset, to make the value of their asset go up.

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

Sure, for those lucky enough to be able to buy a home before it gets too expensive. What about those not lucky enough to do so? Do they not deserve financial freedom?

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

#272

Post by mustyoshi » Tue, Apr 20, 2021, 12:56 PM UTC

effie wrote: post #253

em-bee wrote: post #132

Earlier quoted context omitted.

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…

> 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. It's good because it would motivate owners to own only as few houses as possible (to minimize work on updates), and many more people could own a home then.

It would cause prices to go up because in order to sell it has to he up to code, meaning renovations. It would likely cause consolidation of ownership, something like 70% of all apartments in my area are owned by the same company. And since they have consistent rules... It can be hard for certain people (those with criminal records) to find affordable housing.

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

#273

Post by andrepd » Tue, Apr 20, 2021, 12:56 PM UTC

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…

The fundamental problem is linking "home as a place to live" and "home as an investment". The two things aren't compatible.

If you want to buy a place to live so you don't have to work for a Lord, you want affordable housing. If you have a property which you want to be an investment, you want housing prices to baloon.

Currently the latter is winning.

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

#274

Post by effie » Tue, Apr 20, 2021, 12:56 PM UTC

tlarkworthy wrote: post #244

RcouF1uZ4gsC wrote: post #73

Earlier quoted context omitted.

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.

So you want to drag the majority down in order to reach a level of lowest common denominator of "equity". Pure insanity. Yes the life you are born into is not "fair". But you must also appreciate that the family unit is one of the strongest forces of altruism and inter human bonding for the majority. Break the family and you break the parts of society that are not run on finance. It's would truly cause an incredible…

Bio-robots.

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

#275

Post by neilparikh » Tue, Apr 20, 2021, 1:00 PM UTC

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…

Lobbying and corruption are problems, but do we really think they're harder problems than convincing the landowning majority to support policies that will make the value of their asset go down? I don't think so.

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

#276

Post by gassit » Tue, Apr 20, 2021, 1:00 PM UTC

dbetteridge wrote: post #192

pc86 wrote: post #190

Earlier quoted context omitted.

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.

That is not quite correct. Stamp duty is payable at the time of settlement but it is normally added as a lump sum to the mortgage.

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

#277

Post by ajxs » Tue, Apr 20, 2021, 1:00 PM UTC

jariel wrote: post #189

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'm down-voting you because you haven't made an argument in the face of the issue. The flaw the assumption is that somehow 'buying' a home that is 15x your annual salary, that takes your entire life to pay off, is some kind of 'freedom'.

What's a reasonable alternative, just pay someone else's mortgage instead? Go live in the woods and opt out of the economy entirely?

A mortgage is debt, yes. However the money you put into the mortgage is wealth that you're slowly accruing. If you're just renting a property someone else owns you're not accruing anything at all. No one thinks that taking on a 20-30 year debt is a good thing. People only do it out of necessity.

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

#278

Post by makomk » Tue, Apr 20, 2021, 1:00 PM UTC

barbegal wrote: post #219

Ekaros wrote: post #126

Homes logically really shouldn't be an appreciating asset. After build(including warranty fixes) they should be in best condition they ever will be(unless further invested). And then just wear down from there and require maintenance to even keep functioning. So after 10, 20 or 50 years it should cost less, not more. I wonder how will this look in let's say 100 or 200 years. That is after we have reached full urbaniza…

I think this is something that is often forgotten from the raw sales value numbers. House prices appreciate but at the same time significant money is invested into their maintenance and improvements. A house where no maintenance is done will probably depreciate in value as the building deteriorates. It would be great to see an index of property prices deducting the cost of maintenance and improvements. This is a bit…

Pretty sure this is one reason why passive property speculators prefer flats over houses - houses basically need to be lived in, flats much less so. Ending both home ownership and single-family houses would be a massive gift to property investors.

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

#279

Post by bena » Tue, Apr 20, 2021, 1:01 PM UTC

neilparikh wrote: post #271

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…

Your comment is a massive strawman of the article. The core problem is that once you have a majority of the population owning an asset, they're incentivized to pull the ladder up behind them, and make it difficult for the non-landed to also buy the asset, to make the value of their asset go up. > Owning your own home is, in my view, the first step towards financial freedom. Sure, for those lucky enough to be able to…

Uh, if I buy a property, yeah, I kind of want to make it difficult for someone else to buy it. Seeing as I seek to own it long enough to live on it.

There is nothing about the previous "landed" status of my neighbors that will affect the value of my property. Not to mention, if you're seeking to reside, not speculate, the "value" of the property is kinda immaterial.

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

#280

Post by dbetteridge » Tue, Apr 20, 2021, 1:01 PM UTC

daemin wrote: post #235

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…

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 afford…

Yeah Melbourne and Sydney are just insane, First home owners grant is great on paper but essentially covers none of the expense of buying a first home and like you said encourages the prices to increase even further.

I'm on a decent salary by Australian standards and am going to be waiting at least 2 more years before I can afford a 10% deposit (have been saving for several years already at a lower rate).

Just have to hope all the decent land/houses are still around by then and that the house prices dont outpace my savings.