Housing is a requirement for life, working to decommoditize housing should be a requirement for a modern state.
Maybe treating housing as an investment was a mistake
51–60 of 1001 posts
Re: Maybe treating housing as an investment was a mistake
#52> While the rich are more likely to own homes, tons of middle class and poor people also bought homes and planned their lives under the assumption that housing prices would go up. Tanking housing prices would destroy their trust in the system that they bet everything on. This is pretty much the crux of it. High housing prices could be "fixed" almost overnight, but for almost every citizen of the first world, their ho…
> every citizen of the first world
Where I lived in Italy, people certainly purchase houses, but they don't expect them to have crazy returns like in the US. It's just a way to not pay rent and have something that you can hang on to even if there's inflation or other funny business (something that Italy has seen a lot of).
People even invest in, say, apartments, but it's a similar story: they expect them to hold their value and pay themselves off over a number of years. There are certainly returns on it, but they are seen as steady, long term investments.
Where I live in Oregon, during the most recent boom, there were houses "earning" more than 100,000 a year, just sitting there. That's more than the median household.
Yeah, it's a bit apples to oranges, but still, it's really out of kilter.
Long term, it'd be healthiest if housing were 'boring', neither gaining or losing much. That'd also facilitate people swapping out different housing at different stages of their lives without worrying about timing the market.
For instance, there are a lot of people getting older in the town I live in. Are they always going to want to or be able to shovel snow? Mow their lawns? Maybe a townhouse or a condo would be a better alternative that lets them stay in their general neighborhood.
Re: Maybe treating housing as an investment was a mistake
#53> Meanwhile, renters are desperate. They’re begging for housing prices not just to slow, but to fall. I have a friend who is a head chef at a decently popular bar and restaurant on Broadway in Capitol Hill, Seattle (very trendy part of town if you aren't familiar, steep commercial rent). He lives in a 400 sq ft studio and is barely, barely making it from one paycheck to the next. I am sitting on a 2.6% interest rate…
My rent for my cockroach invested, 150 sq ft apartment is larger than my parent's mortgage for their suburban McMansion about 45m-1h away, and my rent is absolutely on the cheap side for a 1bd room in the area.
In Seattle, 45 minutes away is still within the city limits, unless you're right on the edge of the city limits to start with. And if it's toward Everett even that doesn't save you.
In traffic I often thought about how when I was a kid we got uprooted to a new school at a bad time to save my dad 45 minutes of commute each way, and how 2 hours a day doesn't sound that awful.
Re: Maybe treating housing as an investment was a mistake
#54> Meanwhile, renters are desperate. They’re begging for housing prices not just to slow, but to fall. I have a friend who is a head chef at a decently popular bar and restaurant on Broadway in Capitol Hill, Seattle (very trendy part of town if you aren't familiar, steep commercial rent). He lives in a 400 sq ft studio and is barely, barely making it from one paycheck to the next. I am sitting on a 2.6% interest rate…
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Re: Maybe treating housing as an investment was a mistake
#55Related: Is It Better to Rent or Buy? - an interactive data visualization / calculator. https://www.nytimes.com/interactive/2014/upshot/buy-rent-cal...
is there a non-paywall version of this online?
Re: Maybe treating housing as an investment was a mistake
#56> While the rich are more likely to own homes, tons of middle class and poor people also bought homes and planned their lives under the assumption that housing prices would go up. Tanking housing prices would destroy their trust in the system that they bet everything on. This is pretty much the crux of it. High housing prices could be "fixed" almost overnight, but for almost every citizen of the first world, their ho…
s/retirement plans/state endorsed pyramid schemes/
It's going to collapse one way or another.
Re: Maybe treating housing as an investment was a mistake
#57Earlier quoted context omitted.
Cognitive dissonance means harboring contradicting thoughts. The difference in you and your friend’s situation is caused by the fact that they are selling labor which has a much lower price than the labor you are selling. This is not contradictory, just a consequence of supply and demand.
Yes, there is an inconsistency in the amount of effort expended to survive versus the outcomes of that effort. I can't reconcile them in my head. I'm watching my friend trying not to physically deteriorate and have some modicum of comfort while I sit here on my couch living off savings from the job I recently quit. Nothing I do can be so much more valuable than what he does.
I mean... that's life. What schools should teach is not just "here is a career that matches you're skills" - but more so, "if you choose this career, these are the most probable outcomes and life paths you'll end up in"
If AI takes engineering, medical, and law work away from those professionals - they too could have spent many hours to learn, to then earn little.
Every human has worth, but we all value the type of work differently.
Re: Maybe treating housing as an investment was a mistake
#58> Meanwhile, renters are desperate. They’re begging for housing prices not just to slow, but to fall. I have a friend who is a head chef at a decently popular bar and restaurant on Broadway in Capitol Hill, Seattle (very trendy part of town if you aren't familiar, steep commercial rent). He lives in a 400 sq ft studio and is barely, barely making it from one paycheck to the next. I am sitting on a 2.6% interest rate…
What sucks is a lot of young renters with steady jobs can afford to pay off a mortgage month to month, but they just can't afford that down payment (especially the 20% needed so as to not need to get mortgage insurance)! I was in that position for a while. Every time it seemed like I could afford to put that money down, the housing prices went up! It took a handful of years of renting cheap places (with roommates), living with my parents when I could and getting a few raises at work that I could finally save up enough for a down payment.
Re: Maybe treating housing as an investment was a mistake
#59This doesn't even touch on the fact that you will always require housing, so you can never truly liquidate your primary residence. At best, you can borrow against it. At worst, you sell it once and rejoin the rental market.
This is actually why as a homeowner, I'm not particularly bothered by the value of my house dropping.
Don't get me wrong, it's not exactly fun to watch its price tag drop, but the supposed dollar value of the house isn't "real" unless I'm looking to sell, which I'm not going to be doing unless I'm changing living arrangements, whether that be buying a different house or renting. Its value to me is that it's 1) a home and 2) a semi-fixed cost that won't ever be dramatically changing rather than increasing several percent each year.
Re: Maybe treating housing as an investment was a mistake
#60Policy solution to intractable social differences: Fund UBI with 2.5% SALSA, problem solved. https://www.radicalxchange.org/concepts/plural-property/ Yes, new problems appear. Maybe new problems are less vexing.
I love this idea! Came across it in Radical Markets: Uprooting Capitalism and Democracy for a Just Society by Eric A. Posner and Eric Glen Weyl
https://press.princeton.edu/books/hardcover/9780691177502/ra...