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

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

#361

Post by kQq9oHeAz6wLLS » Tue, Apr 20, 2021, 2:06 PM UTC

bovine3dom wrote: post #77

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…

> 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…

> It isn't giving up your garden: it's swapping it for a much larger shared garden with facilities you could never dream of affording on your own.

And for some people, that's great. For me, not living in a flat in the city (quite the opposite) isn't because I want a garden and facilities all my own. It's because you can't control how terrible your neighbors are, so if they're farther away from where you spend most of your time, even if they're terrible, they have little impact.

Take a loud neighbor who works nights. He'll play his music loud at hours you'd be sleeping, and pound on the wall at hours he'd be sleeping, because you're too loud.

Now add 5000 square feet of land between you.

"Good fences make good neighbors."

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

#362

Post by elric » Tue, Apr 20, 2021, 2:07 PM 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?

Lump sum in Belgium. You might be able to get away with tacking it on to the mortgage, but only if you have additional collateral (another home, rich parents, whatever). Or maybe if it's a really cheap house.

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

#363

Post by twobitshifter » Tue, Apr 20, 2021, 2:07 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…

Moreover, housing prices historically have been linked with median wages. Houses should only be worth as much as buyers can reasonably afford. However if you look at this graph you’ll see that house prices have departed from the historical average significantly, as they did in 2008 before the housing crash. https://www.longtermtrends.net/home-price-median-annual-inco...

Responsible buyers are supposed to put less than 30% of monthly income towards housing, but prices require much more than that. This is leading to most owners and renters being cost burdened and unable to save.

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

#364

Post by willcipriano » Tue, Apr 20, 2021, 2:10 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…

To paraphrase a common saying: "Harrison Bergeron was a warning, not a instruction manual."

https://en.m.wikipedia.org/wiki/Harrison_Bergeron

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

#365

Post by coldtea » Tue, Apr 20, 2021, 2:23 PM UTC

bovine3dom wrote: post #313

coldtea wrote: post #295

Earlier quoted context omitted.

> 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. Any majority is a "local majority". Would it be OK for third parties to come into your community / town etc, and decide for you? That would be a nice racket for lobbyists, too: various interests could hire majoritie…

Yeah, within reason, more global considerations should be taken into account when making local decisions.

Sure, when the local desicions have outside externalities (e.g. pollution).

But this is a case where we're taking about outsiders making it more difficult for locals to hold to their homes, so they (the outsiders) have it easier to live in some place.

How is that OK? Ousiders "really" wanting to live to that place is not enough justification (people want lots of things. Many people want a pony too, doesn't mean they will get one or that they deserve one).

Plus, those outsiders only want to come live to a place (over other places) because the place has been developed well by the locals.

So they like what the locals have toiled and paid to build, and want to make it easier to throw the locals out of their homes, to rent there themselves. Doesn't sit right...

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

#366

Post by swiley » Tue, Apr 20, 2021, 2:31 PM UTC

andrepd wrote: post #273

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.

You could have both if dense housing was allowed to be built and people bought condos.

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

#367

Post by shellfishgene » Tue, Apr 20, 2021, 2:38 PM UTC

Animats wrote: post #4

What's this obsession with increasing housing density? Population in the developing world is leveling off. Most of the developed world is already at "peak child".[1] Housing shortages come from migration to cities, not more people. [1] https://ourworldindata.org/peak-child

One factor that's often ignored is that the space per person has steadily increased over time.

For example, in Germany the average floor space per resident has doubled from the 60s to now, so the same city now requires twice the living space, even with zero population growth! It seems to be similar in other countries. This is mostly due to fewer people living in the same space, not necessarily because housing units are growing.

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

#368

Post by brobdingnagians » Tue, Apr 20, 2021, 2:39 PM UTC

em500 wrote: post #215

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…

The natural state is that people and other animals can only "own" land that they physically occupy and defend by force. The kind of property ownership where (you can make) other people stay out of your house without your own presence and without involving arming yourself is largely granted by governments and paid for in taxes. Fortunately most of us are born in a time and place with governments having reasonable atti…

I'm not a Hobbesian; though I take the point, but I believe that if the government disappeared, people would just start building up a local government to enforce established customs. If people really wanted to steal everything, the government couldn't stop them. The real check on violence is that people don't want to, and are quite happy with peaceful exchange according to their established views. Some places would probably fall into violence, but I think most would simply reorganize and keep going. Strong central governments typically arise from the efforts of a few elite, but decentralized governments themselves exist nearly throughout history because it is a useful construct for the people living in the different places to resolve disputes and live their lives in peace.

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

#369

Post by ethagknight » Tue, Apr 20, 2021, 2:40 PM UTC

hnnameblah365 wrote: post #260

I would pin the failure on how we view home ownership as an investment vehicle. There's little inherently appreciable to a building. In fact they depreciate over time and require constant investment to maintain. The location however can appreciate, which we all agree on. But we never say out loud the underlying mechanism. Locations appreciate in value specifically because more humans want to own it. Viewing homes as…

This is not correct, both land and structure have differing but related values. With persistently increasing construction complexity and building code, replacement cost generously outpaces existing building value. At least from a USA perspective, many neighborhoods are stuck with older, dated housing stock that would be aesthetically better off scraped and rebuilt in modern form, but the existing home is too valuable and ground-up new construction too expensive relative to market.

In typical US middle-income neighborhood, a scraped lot isn't worth much because the cost to build a suitable replacement home is too high, above market rates per sf of living space. Its a risky investment, but someone may agree that the value is worth it and buy it down the road, or maybe not. The same home site with a decent (but boring) home in good marketable condition will be priced relative to median incomes and market values of surrounding neighbors. The home structure is the valuable, appreciated component in this scenario.

Home ownership certainly is an investment vehicle- tradable and you can gain or lose lots of money on it! its also the largest single investment for most/many people. Many investments have operating and maintenance costs, nothing wrong with having to fight some depreciating elements in an investment.

Land value is important. Structure value is important. Pin the failure on viewing homeownership as a "sure bet, can't lose" investment causing too many people to aim to high above market.

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

#370

Post by daemin » Tue, Apr 20, 2021, 2:41 PM UTC

viraptor wrote: post #320

daemin wrote: post #235

Earlier quoted context omitted.

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…

There's another way out which seems to be popular recently - move out of the city and get prices closer to $200k median for an ok house. You can see available houses in Victorian towns disappearing off the market over the last year as people move out enabled by remote work. I get that not everyone can do it, but it's a possibility for more sanity in house ownership for a groups. Unfortunately that also allows Melbour…

The problem is there's already a lot of demand for property in those smaller towns, at least the more desirable ones. So the locals are now the one's getting priced out of the market as more and more city-dwellers are moving to the popular smaller towns.