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

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

#351

Post by Mengkudulangsat » Tue, Apr 20, 2021, 1:51 PM UTC

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…

I do fantasize about owning property sometimes. This transient lifestyle makes picking up certain hobbies (a big aquarium for example) a non-starter.

However if I'm going to spend a big chunk of my net worth on property, I'd rather that property be in a place I'm looking forward to retire in, not in a place I'm bound to because of job opportunities.

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

#352

Post by jeegsy » Tue, Apr 20, 2021, 1:51 PM UTC

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

So much this! The would-be vulcans of the modern world can be so exasperating at times..

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

#353

Post by throwaway316943 » Tue, Apr 20, 2021, 1:53 PM UTC

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,…

It’s not just the acquisition of the land but also the investment in the economy that surrounds the land. All land starts out near worthless and in the middle of no where. Generations of sacrifice and investment are what turns it into a highly valuable property. That process can also reverse if the owner ceases to improve the property and invest in the community.

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

#354

Post by emteycz » Tue, Apr 20, 2021, 1:57 PM UTC

fogihujy wrote: post #345

emteycz wrote: post #307

Earlier quoted context omitted.

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 promis…

You said that "very little was built or maintained after 1989". The exact opposite is true - before 1989 there was a moderate amount of newly constructed incredibly dangerous and toxic buildings violating every urbanistic rule and past plans that were a major downgrade from pre-war comfort (keep in mind that these buildings were built in 1970's, 30 years after the war); and there was absolutely zero maintenance, any repairs that got done were carried out secretly by the inhabitants with stolen material because you couldn't even buy it, and if you could you wouldn't because you'd be accused of the terrible crime of conducting business.

After 1989 the economy was in a bad shape - understandable after 40 years of destruction, but once it stabilized (within a decade, a truly incredible achievement of free markets!) there has been a huge explosion of real estate development, and it's still not finished - I can see from my window right now 5 buildings being repaired and 3 buildings being constructed. But there isn't any propaganda about it, so people further away from my street have no idea, whereas the communists ordinarily used faked/false photos to show off their incredible achievement.

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

#355

Post by dslkfjg » Tue, Apr 20, 2021, 1:57 PM UTC

kiba wrote: post #223

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 a home as a form of wealth necessarily conflict with affordability. We need to consider one or the other in order to make the best use of land, which are finite. If we choose to make having a home a priority, then we need to choose affordability both so that people are less likely to be homeless and so that people can do other thing with their money.

If you have been watching California's experiments with homelessness, especially San Fran. you may have learned that homeless people prefer being homeless even when given free accomodations and when i say accomodations I mean nice hotel rooms of their own.

This is because homelessness is a side-effect of mental illness and drug addiction. The later is not all drug addiction, ( I used to live next to an "invisible" heroin addict which we only learned about when he OD'd) it's a certain type of disorganized-thinking and lifestyle which some addicts manifest.

The cost of housing doesn't cause homelessness; it causes roommates and the conflicts and violence and chaos that imposes on people's lives which is significant if under-studied.

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

#356

Post by kQq9oHeAz6wLLS » Tue, Apr 20, 2021, 1:58 PM UTC

chriswarbo wrote: post #338

chii wrote: post #231

Earlier quoted context omitted.

> 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?

> Why is it inherently unjust? Heh, I wasn't taking a position on renting versus ownership. I said there are pros and cons of both. What is unjust is to advocate for renting, if that rent will go to an owner/landlord. After all, why should owners/landlords exist at all, if renting is apparently so good? Social housing avoids this hypocrisy, since the "owner" is not a person (or person-surrogate, like a corporation).

> Social housing avoids this hypocrisy, since the "owner" is not a person (or person-surrogate, like a corporation).

Like the housing projects in the inner cities?

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

#357

Post by sershe » Tue, Apr 20, 2021, 2:04 PM UTC

kwhitefoot wrote: post #249

harperlee wrote: post #111

Earlier quoted context omitted.

> 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 Higher density has pros and cons. Living in higher density areas can increase quality of life significantly, if you can walk to work, groceries, pharmacy, restaurants, friends, etc. See https://www.theguardian.com/world/2020/feb/07/paris-mayor-un...…

I can walk to all those things even though I live in a 130 m2 house with an 800 m2 garden full of mature fruit trees. There are four supermarkets within 2 km, the doctor and chemist are 1 km away. In many countries it isn't necessary to sacrifice living space for convenience. It is largely a political choice for the country as a whole even though it is an economic one for most of the individuals. Even in densely popu…

1km or especially 2km is not in any way a reasonable walk. It is just barely reasonable for a healthy adult in good weather, and still tedious. I personally find that mid-density is the worst of both worlds, and not just in this regard... I used to live in downtown Vancouver BC and it was great to have everything I use within 200m, now I live in the kind of area you describe (semi-urban detached houses) and I almost always drive, just as if I lived in the woods. In fact, after COVID I wish I had originally moved to the woods!

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

#358

Post by bluGill » Tue, Apr 20, 2021, 2:04 PM UTC

ipaddr wrote: post #343

bluGill wrote: post #311

Earlier quoted context omitted.

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.

In this case that isn't true because the seller is paying out of the full value of the house. When realtors decide give a discount (ie when working for a friend, or other marketing), the seller gets more money and the buyer doesn't see any difference.

There are other ways of looking at it where you are correct.

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

#359

Post by gohbgl » Tue, Apr 20, 2021, 2:05 PM UTC

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…

There are many factors that contribute to appreciation and depreciation. Decay is just one of them. There could be other appreciating factors that outweigh the depreciating ones. Also, if you measure the value of something in a generally depreciating currency, you automatically get rising prices (ceteris paribus).

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

#360

Post by elric » Tue, Apr 20, 2021, 2:06 PM UTC

dbetteridge wrote: post #191

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…

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…

Oh yeah, I forgot about the insurance, which is officially "not required", but no bank will give you a mortgage without one. Depending on how you decide to pay for it (installments vs lump sum), that can end up being another significant expense.