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What broke Sweden? Real estate bust exposes big divide

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Re: What broke Sweden? Real estate bust exposes big divide

#511

Post by matwood »

b112 wrote: post #142
bandrami wrote: post #127

Earlier quoted context omitted.

I don't know about Ireland, but in the US the home ownership rate is higher than it was at any point in the 20th century. So however bad the situation is it doesn't seem to actually prevent people from buying a house.

In the 90s, I didn't know anyone in their 20s, who didn't have a roommate(or two!), or were married. No one I knew, could afford an entire apartment to themselves! I find it weird that people complain about not being able to rent their own entire apartment, but are in their 20s. It wasn't a thing 30 years ago! As one advances in their career, eg in their 30s, then income tends to rise, due to experience, and better p…

Yeah, late 90s/00s I was an exception that I had my own apartment. All my friends had roommates. A couple really industrious ones bought a house and then had 2-3 roommates so they could afford it.

Re: What broke Sweden? Real estate bust exposes big divide

#512

Post by Metus »

brutusborn wrote: post #303
jltsiren wrote: post #83

Earlier quoted context omitted.

Sweden is full of old money, or at least it looks like that from a Finnish perspective. The problem with old money is that if you simply invest the money passively and don't do anything stupid, the next generation is going to be even richer. Both in relative and absolute terms. Being able to live in the most desirable areas is based on relative wealth. If there is a lot of old money, it's harder to make it to the top…

A better solution is land value taxation because it hits those with old wealth the hardest whilst not distorting markets. Wealth tax and inheritance taxes can be gamed and avoided. Land cannot be moved or hidden. Now that a minority of people own land in many locales, this will soon be a politically acceptable policy. Georgism made sense in the 1800s and it makes even more sense now.

Whenever I bring up the topic of Georgism or land value tax, people look at me like I am mentally ill. The idea of taxing the right to exclusive use over a piece of land - something that no human has ever put effort into existing - is so utterly foreign to most people. Unfortunate.

There was a reform of the German property tax system, since the federal constitutional court ruled that the old system was unfair. The current model allows the 16 states to set up their own system, if they wish so, and interestingly enough, Baden-Württemberg turned the property tax into an actual land value tax, taxing only the land value itself, not the real estate on it. Of course there was a documentary the other day about a land owner crying that he is forced to build more houses to rent out and cover the cost of the LVT. That was the point all along!

Re: What broke Sweden? Real estate bust exposes big divide

#513

Post by whiddershins »

watrami wrote: post #103

It seems like it's the same story everywhere I look. Housing is the main driver of inequality and there is little change happening. We have the same problem here in Germany. I am currently living in Munich to finish my CS Master's at TUM and build a startup, and it is absolutely impossible to find anything remotely affordable. I am supported by two startup scholarships and make enough to get by, but no landlord even…

This is all about regulation, although each layer of regulation tends to be popular.

Many things typically seen as good add to the cost of housing.

Building is difficult because of zoning restrictions.

Building is expensive because of labor and zoning and construction and accessibility and many other regulations.

Renting also is risky for a landlord because of eviction protection laws.

And so forth. Housing doesn’t need to be so expensive and scarce. We made it so. We have far better technology than in the past, we can build better, safer, faster, cheaper. Except we can’t.

Re: What broke Sweden? Real estate bust exposes big divide

#514

Post by beebeepka »

nemo44x wrote: post #502
Radim wrote: post #383

Earlier quoted context omitted.

Why stop there? Since you believe that human reproduction is a de-facto property of the state, simply calculate how many women should have babies, for optimal society , and force them to? No need to muck around with some tax incentives. Redistribute the true source "commodity". As a bonus, if you're high up enough, you might even get to choose who mates with whom.

There might be a pretty huge gap between incentivizing responsible people to create families and own property (these are very good things for a country and society) and forcing women to reproduce and with whomever the government assigns to them.

"Responsible people"

Re: What broke Sweden? Real estate bust exposes big divide

#515

Post by bjornsing »

tmnvix wrote: post #394
serpix wrote: post #358

Earlier quoted context omitted.

With mortgages paying down only the interest doesn't this mean people can become chained to the property? Unable to sell due to the value drop and having to own money to the bank after selling?

Negative equity is going to become a real problem for a lot of people who purchased in booming markets over the last few years. As far as I'm aware, most places are 'non-recourse'. Some people might say "if you can carry on making the payments you'll be fine". This isn't true though. Not being able to move city for a job, being unable to upgrade to a larger place to start a family, or feeling financial pressure to st…

Swedish home loans are in general not nonrecourse: the bank can take everything you have, and basically enslave you for 5 years.

Re: What broke Sweden? Real estate bust exposes big divide

#516

Post by whiddershins »

toyg wrote: post #463
badpun wrote: post #441

Earlier quoted context omitted.

Central European salaries are getting high enough to not make remote work for abroad companies as atractive. $80k+ per year is becoming more and more common for Seniors in Poland.

Central Europe is also under the renewed threat of Russian invasion. I know a few businesses that were hit by Herr Putin's latest adventure.

Why are you comparing Putin to Hitler instead of Stalin.

Re: What broke Sweden? Real estate bust exposes big divide

#517

Post by klabb3 »

nivenkos wrote: post #7

The main problem is the terrible rent control system - with a lucky few getting rent-controlled first-hand contracts, and everyone else facing a cut-throat almost completely unregulated market of sub-letting. Rent control never works.

Yes it’s true it didn’t work, and as someone who grew up in Stockholm I used to be very sour about the situation, still am to some extent. However, it’s worth pointing out that the transformation of rentals into condos (and a couple of other deregulation efforts) did lubricate the market, but only to a limited degree, and now we instead have these massive “investments” where the rest of the economy is held hostage due to everyone having huge loans. In short, there are massive red flag issues in all market forms, in a place like Stockholm.

Which leads me to this crazy idea that what if the problem is instead a… lack of total amount of housing? Sweden is incredibly slow, expensive and bureaucratic to build new housing in, yet we’re urbanizing just as much as anyone else. To me, the government should have a clear policy goal of having housing supply keep up with population growth, at the very least. Now, I care less about HOW (everyone can argue about that until eternity) and more about just ensuring it happens, and not lagging behind decades. If politicians drag their feet, it should automatically switch over to dropping all non-essential regulations (that would put a blowtorch to their asses).

In either case, I’m not in Sweden atm and I don’t feel particularly hyped about the coerced gambling I’d have to participate in if I were to settle there again permanently. It’s a shame, because it really destroys our ability to attract international talent in the startup world and so on.

Re: What broke Sweden? Real estate bust exposes big divide

#518

Post by xdennis »

FpUser wrote: post #17
belorn wrote: post #16

It should not be a major surprise that the gap between the haves and the have-nots will widen if you have a large compareable influx of have-nots, or to speak more precisely, an influx of new citizens with low social-economic status compared to those who already were ctiziens. In a very dispassionate perspective, it is just plain math. It is going to take time to return back to the same levels as before.

>"It is going to take time to return back to the same levels as before." Growing divide is universal and pending some tectonic changes in the way our society operates there is no coming back.

> tectonic changes in the way our society operates

AI and/or climate change.

It may fuck up the planet but at least I'm going to enjoy the housed suffering too.

Re: What broke Sweden? Real estate bust exposes big divide

#519

Post by bjornsing »

anotherhue wrote: post #434

The general form seems to be, if you were born after 1990, then you are entirely locked out of the asset class that drives wealth, which also happens to be a requirement for existence. Nothing changes because the governments are largely composed of people for whom this does not apply.

> you are entirely locked out of the asset class that drives wealth

No asset class can both “drive wealth” (in a predictable manner) and be available to all. Exclusivity is fundamental to privilege.

Re: What broke Sweden? Real estate bust exposes big divide

#520

Post by brutusborn »

Metus wrote: post #512
brutusborn wrote: post #303

Earlier quoted context omitted.

A better solution is land value taxation because it hits those with old wealth the hardest whilst not distorting markets. Wealth tax and inheritance taxes can be gamed and avoided. Land cannot be moved or hidden. Now that a minority of people own land in many locales, this will soon be a politically acceptable policy. Georgism made sense in the 1800s and it makes even more sense now.

Whenever I bring up the topic of Georgism or land value tax, people look at me like I am mentally ill. The idea of taxing the right to exclusive use over a piece of land - something that no human has ever put effort into existing - is so utterly foreign to most people. Unfortunate. There was a reform of the German property tax system, since the federal constitutional court ruled that the old system was unfair. The cu…

Thanks for the example, I didn’t know of any good examples of LVT. Hopefully it becomes more widespread.

Unfortunately it’s not easy to understand why it is so effective, thus why people hear it and assume insanity.

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