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Homes in 97% of U.S. cities are overvalued, Moody's says

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Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#551

Post by aqme28 »

sokoloff wrote: post #542
pj_mukh wrote: post #361

Earlier quoted context omitted.

I really think most of the solution is in the first part of your plan. There’s no need to micromanage tenant-landlord relationships or setup governmental panels on who historically deserves to live where, if the government can just make sure there is an oversupply of decent housing at all affordability levels. The rest really takes care of itself at that point.

I support government-owned housing at a variety of sizes and configurations , but I don’t want government involved in providing luxury housing. Government studios, 1BRs, 2/1s, 3/2s, 4/2.5s, and 5/3s for basic housing needs for singles and families? Absolutely. Government 10 bedroom, 9000 sqft seaside mansions? Not just no, but hell no!

I agree of course, but I'm not sure what your point is, other than to be a little bit distracting. It seems pretty reasonable for a government to subsidize modest multi-family homes without subsidizing mansions.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#552

Post by mschuster91 »

jillesvangurp wrote: post #464
turtledove wrote: post #345

The sooner we collectively decide that housing shouldn't be a market, the better. We all need it, and we should figure out mechanisms to make it available to all. Practically that means paying to build and maintain housing stocks, changing tax incentives so developers are incentivized to build more housing and less luxury housing, charging a premium for unused land in desirable areas (parking lots don't house people)…

The inevitable outcome of housing inflation and elimination of the middle class is slums: illegal housing. People will have to live somewhere. And when that becomes unaffordable they'll just improvise. This is not a technical problem but a policy problem. The solution is changing the policy. The current policy is to drive up housing prices by creating completely artificial scarcity. All the land is owned and earmarke…

> The current policy is to drive up housing prices by creating completely artificial scarcity. All the land is owned and earmarked. Just not for housing.

That's not the problem either, the scarcity is (with the exception of foreign - i.e. Chinese and Russian - money laundering) natural and not artificial. The true problem is that following mechanization in agriculture many people emigrated from rural areas, resulting in a lack of infrastructure because it was unsustainably expensive for the low population density - particularly high speed internet and accessible (=walkable or within reach with a bicycle) basic infrastructure such as a grocery store, a GP and pharmacy and schools. That lack drives more people away, it's a vicious cycle that will need enormous amounts of money to break through.

If you want to work a modern service-oriented job or even a manufacturing/industry type job, you have to move to an urban or suburban area, and even if you have money and want to provide gainful employment you simply can't because there is no high-speed Internet for your business.

What needs to be done is that the government aggressively invests into "flyover" states to provide perspectives for the people living there and considering moving to a better place - but unfortunately I don't see that happening, not in the US and not in Europe where we have similar problems.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#553

Post by sokoloff »

aqme28 wrote: post #551
sokoloff wrote: post #542

Earlier quoted context omitted.

I support government-owned housing at a variety of sizes and configurations , but I don’t want government involved in providing luxury housing. Government studios, 1BRs, 2/1s, 3/2s, 4/2.5s, and 5/3s for basic housing needs for singles and families? Absolutely. Government 10 bedroom, 9000 sqft seaside mansions? Not just no, but hell no!

I agree of course, but I'm not sure what your point is, other than to be a little bit distracting. It seems pretty reasonable for a government to subsidize modest multi-family homes without subsidizing mansions.

GP was explicitly arguing for government-assured “oversupply of decent housing at all affordability levels.”

I do not support government assurance nor ownership for the high-end or luxury levels of affordability.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#554

Post by mschuster91 »

pj_mukh wrote: post #361
turtledove wrote: post #345

The sooner we collectively decide that housing shouldn't be a market, the better. We all need it, and we should figure out mechanisms to make it available to all. Practically that means paying to build and maintain housing stocks, changing tax incentives so developers are incentivized to build more housing and less luxury housing, charging a premium for unused land in desirable areas (parking lots don't house people)…

I really think most of the solution is in the first part of your plan. There’s no need to micromanage tenant-landlord relationships or setup governmental panels on who historically deserves to live where, if the government can just make sure there is an oversupply of decent housing at all affordability levels. The rest really takes care of itself at that point.

> There’s no need to micromanage tenant-landlord relationships or setup governmental panels on who historically deserves to live where, if the government can just make sure there is an oversupply of decent housing at all affordability levels.

The problem is, that is outright impossible in urban areas where almost all space is already built out, not to mention it is immensely wasteful (8% of all CO2 emissions is caused by the manufacturing of concrete!).

Governments should rather look into making rural areas livable again (by subsidizing basic infrastructure such as internet, grocery stores, doctors and public transport).

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#555

Post by [deleted] »

somenameforme wrote: post #414
scarface74 wrote: post #250

Earlier quoted context omitted.

Yes, and that’s even more of a reason to be putting extra money into the market if you have a ten year+ time horizon.

I'd reference the Nikkei 225 circa 1990 [1]. That graph is not inflation adjusted. Up to 1990 everybody thought Japan was well on its way to becoming the world's largest economy on an exponential and unstoppable economic acceleration. And it was unstoppable. Then it stopped. I am not saying this will be the case, but rather that we're at what is likely the largest inflection point in modern history, and trying to pre…

[deleted]

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#556

Post by Ferrotin »

turtledove wrote: post #454
cycrutchfield wrote: post #433

Earlier quoted context omitted.

No, profit is icky and illegal apparently.

Profiting from housing , yes, is not something I personally consider moral. But also, I believe that we don't need to meet my fairly radical moral stance to make housing more affordable and attainable for all. We can make incremental progress here by just tweaking incentives. We can go further by reducing profits. It's not some binary all or nothing affair.

I don’t like landlords (such as those in SV) collecting so much of the value, but a more productive solution here is minimal zoning, a high land value tax (with other taxes lower), and letting people do what they want with their property, allowing some tragedy of the commons with respect to traffic and population.

This also means deadbeat tenants get kicked out, but I think that is intrinsically a good thing. Occupying somebody else’s home and not moving someplace you can afford is just immoral.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#557

Post by mellavora »

notch656a wrote: post #409
turtledove wrote: post #393

Earlier quoted context omitted.

Yes. And also no. Today, if I cannot pay, I get no housing. Taxes allow us, as a community, to decide that we should all chip in a little bit extra (commensurate to our means) to make sure everyone has a roof over their heads. Also, government operated facilities do not have a profit motive, so there's less incentive to maximize the cost of housing.

>Also, government operated facilities do not have a profit motive, Great, so the shit-show we have now, except without any incentive to efficiently spend. Sure that will go over swimmingly. Everyone knows that government construction projects are known for coming on-time and on-budget, and for the best value.

Ah, the classic "private enterprise is better than government" argument!

Private enterprise is good at projects where the project owner can (directly) capture the majority of the value created and is responsible for the majority of the costs involved in that creation. The mis-alignment is that this creates strong incentive to shift the costs outside the organization.

Government is better at projects where the majority of value created is diffused across a large share of the population and/or over a long time frame. They do have a strong incentive to keep costs down, because costs are paid by taxes and taxes are unpopular and lead to revolution.

This is simple economics.

There are numerous examples of government projects which may or may not have been under budget, but which created 10x or 100x or 1000x returns. Things like "public roads", "internet", "education" spring to mind.

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#558

Post by mellavora »

shetill wrote: post #474
turtledove wrote: post #345

The sooner we collectively decide that housing shouldn't be a market, the better. We all need it, and we should figure out mechanisms to make it available to all. Practically that means paying to build and maintain housing stocks, changing tax incentives so developers are incentivized to build more housing and less luxury housing, charging a premium for unused land in desirable areas (parking lots don't house people)…

The reason the housing has turned into such a market is not because the evil overlords are deciding. It's due to overwhelming demand and the supply cannot keep up, so landlords have the freedom to choose any prices. The reason there is so much demand is because there are way more people on this planet now than there ever used to be. So if you want cheaper houses, solve the overpopulation problem first.

or maybe the zoning problem which keeps the supply down?

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#559

Post by mellavora »

closedloop129 wrote: post #525
nxm wrote: post #509

Earlier quoted context omitted.

If there is a recession, young people will not be in a position to buy homes

They will, as long as they have a job. All the forfeited houses from the people who cannot serve their mortgages will flood the market and drive down prices. Additionally, all the surplus construction infrastructure will be there, fighting for every project, which will make new houses cheap.

> All the forfeited houses from the people who cannot serve their mortgages will flood the market and drive down prices.

I used to think this.

How does your model change if there is a large pool of private equity, ready to buy properties for cash, and turn them into rental units?

Assuming this pool can easily handle the flood (which it looks like it can).

Re: Homes in 97% of U.S. cities are overvalued, Moody's says

#560

Post by adflux »

maccard wrote: post #489
glerk wrote: post #481

Earlier quoted context omitted.

Housing shouldn't be a market? Then how would housing be allocated? The state builds and gives housing to everyone? Maybe you should take a trip to Eastern Europe one of these days to see the final result of what you're advocating. Pros: everyone is given an apartment to live in. Cons: your city's skyline looks like this: https://i.imgur.com/5X1sIeP.jpg "We collectively decide" just means you decide for me. You think…

Eastern European cities aren't the only examples. Nordic cities (e.g. Stockholm and Copenhagen) are great examples - they have different problems but people are housed. Cities like Berlin don't have a speculative housing market due to excellent renters rights meaning the majority of people rent long term. Finally, Vienna is the poster child for "how to do social housing".

I was in Copenhagen last week and spoke to a dozen people who all agreed that the housing market there is terrible aswell.
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