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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

#341

Post by neilparikh »

chii wrote: post #310
neilparikh wrote: post #264

Earlier quoted context omitted.

> The owner paid to have the building constructed. Much of the rent paid in big cities is not for the construction or maintenance costs, but the land value. Did the owner construct the land?

> Did the owner construct the land? The land itself had to be acquired somehow. The very first owner paid for an army to take the land from the indigenous population that "owned" it, and that "cost" is a chain that is linked all the way to today (and at every step of the transaction, somebody profits by increasing the price a bit). So either you raise another army today (at an even greater cost) to acquire the land,…

Your initial claim was about the situation being just. This argument explains why and what situation we have, but you've done nothing to explain why it's just. "Raise another army or pay the price" is hardly a ringing endorsement of the fairness of the system.

The key thing to note is that this isn't the only model of land ownership possible. There are other that are more fair (land value taxes and community land trusts for example).

To be clear, I don't really have anything against individual landowners; it's the system that's unjust.

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

#342

Post by jcfrei »

brobdingnagians wrote: post #80

Even from the title, the implication is that "home ownership" is a "policy" from the government rather than just a natural state of people acquiring and improving the land. It implies the government can simply revoke home ownership by a new policy. Property ownership and improvement isn't a privilege "given" to us by a benevolent government with their immaculate "policies" from time immemorial. People are the source…

No, the government doesn't own you. But the system which assigns property rights belongs to the government. If the government (meaning the public institutions) disappears so does your claim to your property and you will likely find yourself defending it by force.

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

#343

Post by ipaddr »

bluGill wrote: post #311
pc86 wrote: post #188

Earlier quoted context omitted.

Buying a house for 10% down all in would be a dream in the majority of the US. Yes, FHA or FDA allow 3.5% or even 0% down in some circumstances but you're going to end up in an undesirable area (FDA) and be paying hundreds a month for mortgage insurance (both FHA and FDA). Which, while it sounds like something everyone should have, is you paying for the bank's insurance in case you default on the mortgage. To avoid t…

Realtors commissions? There are none, the seller pays those in almost all case. It is possible to hire a buyers agent who works for a fee from you, but that isn't common (and I'm not sure how it works) so I'll ignore it. There are closing costs, but they are not a percentage in general.

If the seller pays the buyer is the actual one who pays.

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

#344

Post by dslkfjg »

andrepd wrote: post #282
kumarvvr wrote: post #183

Earlier quoted context omitted.

Most homes are purchased for the purpose of living in them. Additionally, monthly rental income is less than a quarter of loan payments, assuming 80% of total is taken as loan, which is true in most cases. Loan tenures are about 25 years, so most families take a home and pay the loans during their active service life. About 10 or 15 years down the line, one or two floors are added to tge house, for rental purpose. He…

> Most homes are purchased for the purpose of living in them. [citation needed]

The number of people who buy homes to live in them greatly exceeds the number of people who buy homes as investments. That seems obvious to me. The only way most housing could be investment property is if investment vehicles each had so many houses, literally tens or hundreds of thousands, that their total ownership exceeded that of ordinary people .

As it turns out, this is not the case:

https://www.statista.com/statistics/187576/housing-units-occ...

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

#345

Post by fogihujy »

emteycz wrote: post #307
lucian1900 wrote: post #122

Earlier quoted context omitted.

You have described very well the limits of social democracy, indeed. Ceding any ground to markets and capital ends up eroding any gains won by the working class. Similar happened after capitalism was restored in Eastern Europe. Even though housing was built and maintained just fine for many decades, very little was built or maintained after 89 since there was no profit in it.

This is absolutely false. I have lived in many of these communist buildings, and the reality here is that these buildings are built so extremely badly and without any consideration of the surrounding that nothing can be done. The communists used toxic materials, didn't care about maintenance and simply built a wall where a maintenance shaft should've been, didn't care about safety, didn't care about families sharing…

My original point was just that; public housing is not something you just do with a one-time investment, and it requires a serious long-term commitment to keep it viable.

I agree that many of the previous projects failed to commit to keeping those buildings in shape and I also doubt that any modern democracy would ever commit to such endeavours in the future; nobody wants to make very expensive, very long-term promises like that.

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

#346

Post by macinjosh »

In the US you can get a USDA home loan. The minimum down payment is ZERO. The mortgage insurance is incredibly affordable as well. The catch is you have purchase a home in an approved rural area. I grew up in a house paid for by a USDA loan. We lived in a small town just 5 miles from a larger city that had all the opportunities we needed.

We don't have an affordable housing issue. There are plenty of affordable places to build and buy a home outside of NY, SF, and . We have problem where everyone wants to live somewhere that has cachet not a small rural town.

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

#347

Post by dbetteridge »

verelo wrote: post #298
dbetteridge wrote: post #280

Earlier quoted context omitted.

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 t…

I love, as an Australian, waking up in the morning seeing the Australians all talking. During the day it’s all North Americans, but obviously this is a game of time zones. Anyway. I just wanted to say that, and also, this issue is seemingly everywhere. I’ve been in Toronto Canada for over a decade now and prices have gone crazy for almost that entire time. When i arrived a house in the city was 350-400k, that same ho…

I'm an Australian in London so for me its only mid afternoon :D

Goddamn those are some crazy numbers, how does anyone even begin to afford that? You'd be saving for 20 years just for a deposit....

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

#348

Post by tedk-42 »

The rich are getting richer because they are able to acquire more and more property and prices keep going up.

Simply limit the number of properties a person can own would solve a lot of price issues.

Also limiting property as something you can pass down would drop prices fast as well.

These things are impossible because the rich and their property ownership is protected and this is a dangerous idea for the masses

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

#349

Post by macinjosh »

Ekaros wrote: post #104
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.

100%! We need to find incentives for people to move to small towns. Small town life can be absolutely wonderful and can still take place close enough to population areas.

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

#350

Post by mariodiana »

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…

Plus, when a 100-year pandemic hits and people flee the nearby metropolitan area for your upstate town, waving wads of cash and bidding up prices, and your landlady decides she'd like to get in on the action and put up for sale the house you live in, so on top of all the other stress and uncertainty of living through a 100-year pandemic you can also wonder where you're going to find a new place to live, you'll thank your lucky stars you never made the mistake of becoming a homeowner.
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