Maybe treating housing as an investment was a mistake • Hacker News Board

Re: Maybe treating housing as an investment was a mistake

#221

Post by NovemberWhiskey » Mon, Mar 06, 2023, 5:46 PM UTC

nerdponx wrote: post #46

mjr00 wrote: post #10

> 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…

What I think would help at least is if prices stopped increasing. That way, people who buy now at least won't lose money, but the expectation that valuations will continue to go up will have to taper off. Also, in the case of high-cost coastal cities, I don't think the issue is trust in government propping up prices, as much as it's trust that demand will continue to outpace supply for the next several years at least…

That isn't an equilibrium. If the market formed the expectations that property values were going to stop increasing, then property values would drop - because the current price bakes in the assumption that they're going to keep increasing.

Re: Maybe treating housing as an investment was a mistake

#222

Post by TheDesolate0 » Mon, Mar 06, 2023, 5:46 PM UTC

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Re: Maybe treating housing as an investment was a mistake

#223

Post by bmitc » Mon, Mar 06, 2023, 5:46 PM UTC

hinkley wrote: post #75

goosedragons wrote: post #44

Earlier quoted context omitted.

The majority homeowner class. Which is why politicians enabling it keep getting voted in.

[flagged]

My property taxes are about a third of my total payment every month, where the other two thirds are the actual mortgage. The property taxes are over 50% of what my total rent was before I got a house, which was not low. I'm happy with my town's management, who seems to use their budget quite well, but property taxes can really get you.

I think taxes should be increased on those with investment homes, second homes, mansions, and the income and wealth of the wealthy rather than just nickel and diming the middle class.

Re: Maybe treating housing as an investment was a mistake

#224

Post by lotsofpulp » Mon, Mar 06, 2023, 5:46 PM UTC

lbotos wrote: post #100

joshocar wrote: post #79

Earlier quoted context omitted.

In general, chefs, and anyone who works in the kitchen, are severally underpaid for the skill and amount of work the job takes. It's long hours in a hot, cramped, very high stress environment for peanuts. Not to mention the terrible hours. I have a very brief stint in the food industry when I was a kid and it was enough for me to say I would never do it as a career.

Is them being underpaid not a function of buyers not willing to pay more for the goods? I'm not under the impression that most restaurateurs are "raking it in" staff be damned. Sure, at the ultra high end, yes, but for most restaurants a chef pay is function of the market, right?

It is a combination of people willing to work for low pay, and buyers not willing to pay more.

Re: Maybe treating housing as an investment was a mistake

#225

Post by kspacewalk2 » Mon, Mar 06, 2023, 5:46 PM UTC

scruple wrote: post #204

highwaylights wrote: post #140

Earlier quoted context omitted.

This astonishes me about the US real estate market and is something I was only educated to on HN in the last week or so. I had absolutely no idea that 30 year fixed mortgages were not only widely available but the common standard there.

What are the mortgage terms where you're from? In always curious to understand how other countries and systems deal with this but I'm largely ignorant to it outside of anecdotes like this.

The standard in Canada, for example, is a 25 year mortgage which you renew every 5 years (fixed or variable, your choice).

Re: Maybe treating housing as an investment was a mistake

#226

Post by donnowhy » Mon, Mar 06, 2023, 5:46 PM UTC

atomicnumber3 wrote: post #131

atemerev wrote: post #85

Earlier quoted context omitted.

And the fed is absolutely, 100% riskless, right? Nothing ever will happen to it?

I'm not sure if you're being glib or not, but if something "happens to" the Fed, we have much bigger problems than anything as boring as investing risks. It probably means WW3 or California is seceding or something.

I think atm the Fed is the main force holing the USA together, considering all the bi-partisan polarization

all ways to divert the "voltage" across elite and commoner classes which are the real source of this tension.

I'm saying that wealth inequality creates something quite comparable to 'voltage', this creates a tension which WILL get released (because physics). But due to active (social-)technological management this tension is getting re-focused into blue Vs red bi-partisan politics, as well as other expressions of winners fighting losers (including gender 'equality' tensions, trans and transphobics, etc..)

Re: Maybe treating housing as an investment was a mistake

#227

Post by cced » Mon, Mar 06, 2023, 5:47 PM UTC

jb12 wrote: post #158

lalos wrote: post #116

Easily fixed with a tax system: 1) first home tax-free - the address you submit your yearly taxes on. Incentivize people to own at least one home. 2) second property you pay taxes for both homes now - no more tax free benefit since you are able to afford more than one place. 3) more than 2 properties you pay taxes for all of them times some factor 0.05*N houses. Fudge around with the factor to allow more supply for a…

I buy one house, my wife buys one house, we set up one trust each for two of our kids to own one house, we get four houses tax free

I think OP's point is the introduction of limits to the benefit of owning multiple properties. Hard to see OP replying with "Oh gosh, darn it you got me again" as a response to your comment and much more likely to further develop policy that would stay true to the idea that being able to afford more means you should pull more weight.

Re: Maybe treating housing as an investment was a mistake

#228

Post by davidw » Mon, Mar 06, 2023, 5:47 PM UTC

nacho2sweet wrote: post #208

davidw wrote: post #64

Earlier quoted context omitted.

> But it's hard to see evidence of much political will to solve these problems. Disagree. The YIMBY movement is picking up steam in a big way. Here in Oregon, we re-legalized 4-plexes in our cities and the woman responsible, Tina Kotek, is now our governor. She's pushing another big housing bill. Our mayor in the city I live in regularly attends our YIMBY group meetups. It's gotten bad enough in enough places that th…

I mean good luck but the YIMBY movement is a very pro investor movement. Decrepit old SFH selling for $1.6 million turned into a 4 plex here in Vancouver would see each unit in the 4 plex selling for $1.4+ million (maybe $1.1 for the basement suite). Friend bought in a converted old place 780 sqft attic suite $940k. It doesn't really make stuff affordable. It was sold here as "the missing middle" and they basically d…

Just because someplace is so deep in the housing debt hole doesn't mean the approach isn't a good one.

Making more of something when you have a shortage is the way to fix it.

4 nice, brand new 1.4 million dollar homes is 1) more housing and 2) cheaper than a decrepit 1.6 million dollar home. It sounds like progress even if it hasn't fixed all the problems.

Sounds like they need to just keep going down that path of legalizing housing. Where I lived in Italy, it was pretty normal to have 6/8/10 home buildings, and that was in a town of maybe 200K without any serious geographic constraints.

BTW, nothing saying you can't also do some things to directly help people who can't afford a million dollar home. Subsidized housing is good too - just that it's tough to create enough of it, so we need to fix the broken market too.

Re: Maybe treating housing as an investment was a mistake

#229

Post by mjmahone17 » Mon, Mar 06, 2023, 5:47 PM UTC

mjr00 wrote: post #118

andrewmutz wrote: post #62

Earlier quoted context omitted.

> You'd be destroying everyone's retirement plans and there'd be major economic repercussions I think that exaggerates it. Most retirees aren't profiting from the home they own if they live in it. The "income" from it is just imputed rent. So if the housing supply increases dramatically, that imputed rent drops, but it doesn't matter since the cost of housing drops as well.

Many (most?) retirement plans involve downsizing from the large home in a (sub)urban area where they raised children and worked for most of their life to a lower-cost area in a lower-cost house. If my SFH is worth $1,000,000 and my retirement plan involves selling and moving to a $500,000 condo, that's $500,000 of money in my retirement account. If politicians implemented a policy that slashed housing prices in half,…

On the other hand, we’ve made it so new condos are so hard to get built that a 2 bedroom condo in a walkable neighborhood (which you likely need when you retire) is the same or more expensive than a 4 bedroom suburban home. In order to be able to downsize, you need the smaller unit to be less expensive than your current home, and in many markets right now that’s barely, if at all, the case.

Re: Maybe treating housing as an investment was a mistake

#230

Post by giraffe_lady » Mon, Mar 06, 2023, 5:47 PM UTC

lotsofpulp wrote: post #156

giraffe_lady wrote: post #110

Earlier quoted context omitted.

Everyone trying to convince you to be ok with this but no, you have seen it correctly and it is wrong. People can work themselves to death doing jobs that benefit us, and what they receive for it is misery and precarity. Trust your own judgement and don't accept this as a natural, inevitable, or just state.

Then how do you allocate who gets to live in a highly desirable place like Seattle?

Would it even be highly desirable without any of the restaurants, retail and other services that don't provide a high enough wage to live there? My guess is that for a lot of the people living there now the answer is no.

We require these services but don't don't provide an acceptable living to those offering them, expecting them to sacrifice their health and comfort for our benefit.

I don't have a solution to how to "allocate" who "gets to" live in a certain city, and it's not in my role or expertise to. But the problem exists currently regardless of that, and what we do have is not a solution.