31–40 of 84 posts
The SoCal housing market is insane, especially San Diego where the pay to mortgage payment ratio is completely off-kilter. Don’t know how this city is going to function in 10-20 years.
The 2017 tax act had an obfuscated impact on corporate ownership of houses. Capping the personal SALT deduction while simultaneously lowering the corporate tax rate made local tax policies to increase local ownership ineffective.
Could you explain ?
1. It became was more-expensive for individuals to own a house, especially in areas with high local property taxes. (Losing the ability to deduct those payments from their personal federal income bill.)
2. Taxes on corporate profits went down in general, and some portion of those corporations may be in the business of buying housing and then renting them out. (Since companies are taxed on profit rather than income, they already pseudo-deduct property taxes and other expenses.)
That said, those two items don't feel like, er, "two ends of the same see-saw" to me, especially given how #2 is very broad.
The 2017 tax act had an obfuscated impact on corporate ownership of houses. Capping the personal SALT deduction while simultaneously lowering the corporate tax rate made local tax policies to increase local ownership ineffective.
What do federal corporate tax rates have to do with municipalities setting their own property taxes? Nothing stops them from giving preferential treatment either to primary residence homeowners. Municipalities are their own worst enemies with restrictive zoning and small-minded inability to consolidate services with neighboring districts that don't need so much duplication.
Any way you look at it, the government has to kick existing owners in the teeth to fix this crisis. Housing prices need to return to a reasonable multiple of wages, and that can only be done with supply. Everyone is going to have to get over the idea that they are "building wealth" and "getting ahead" by merely owning a box.
> kick existing owners in the teeth to fix this crisis You're assuming a definition of "crisis". 2/3 of households own their own homes, and a big chunk of those that don't aren't looking to buy in any circumstances. As much as we hear about the high cost of housing, it's only an issue for an extremely vocal minority. That's not to say I don't view it as a problem (clearly it is) but I'm skeptical it's going to win an…
If I lost my job and was unable to find something reasonable in my relatively non-existent local job market, I would be looking to move to somewhere with a larger employer base and barely be able to make a down payment on entry level housing.
Earlier quoted context omitted.
Governments will choose the path of least pain everytime and that means EVERY SINGLE TIME they will choose to hyperinflate the money supply rather than pay their debts. No one is going to purposfully crash the single largest market in the world. Hyperinflation is comming.
Been hearing that since the 1970s, with more reason. 1979 looked a lot more like hyperinflation than 2023 did, with 14% inflation. By the way, hyperinflation doesn't just mean "large inflation". It's defined as 50% increase in prices per month . Yes, governments often (not always) choose to inflate the money supply rather than pay their debts. No, nobody deliberately chooses hyperinflation. Mind you, you could be rig…
Entire foreign countries (read: most of the world worth caring about) invest in and hold the US, whether that's stocks or bonds (Treasury bonds especially) or literal USD. The only way the US crashes at this point is if the entirety of humanity has shit the bed, it's otherwise a force of nature only going up up up.
Encouraging as many voters as possible to own homes was one of the worst mistakes of all time in the us/canada
Earlier quoted context omitted.
Increasing supply in population centers also raises demand. Think about why it's in demand in the first place: it's because there is high density (and more opportunities).
Barring unlimited immigration, we could build enough high-density housing in cities to meet demand. (At least, we could if we fixed zoning.) (Or, we could in most cities. A few, like New York and San Francisco, are very limited in terms of available land.)
Earlier quoted context omitted.
Great. Housing should not be an investment and chasing ever-increasing property values as a society is obviously unsustainable. If you own a house as your primary residence, then its market value shouldn't really matter, because the value has no impact on your quality of life.
If you buy a house and it appreciates 40%, you can borrow against that equity. You've got a heck of a cushion in the case of any negative event. Including losing your job.
Earlier quoted context omitted.
Zoning and parking minimums are the real problem. Ensure houses are safe (fire, collapse, etc.) and let the market decide where, when and what should be built.
Exactly -- Tokyo has kept housing costs under control for this reason. There are zoning codes in Tokyo, but they're quite flexible compared to what people in the US are used to. In addition, perhaps most importantly, it's not possible to oppose construction, as opposed to the the US, where literally anyone can halt a construction project indefinitely for literally any bogus reason. "It might cast shade on 1 square fo…
That's not really surprising, considering that's exactly how interest rate increases are supposed to work. They crowd out a bit of business investment and a lot of housing investment [1]. This in turn cools the economy by curtailing construction. Unfortunately, housing in most areas was screwed to begin with. This was not nearly the case with prior inflation bouts that required rate increases. The Fed was left with t…
Prices consistently went up over the last couple years of high rates. The recent fed funds rate drop didn't seem to help, and last I checked loan rates had stayed flat or actually gone up a bit.
If loans weren't hurt enough them the Fed stopped raising rates too early and dropped much too early. Otherwise it would seem that they dropped in anticipation of something coming and loan rates are staying high anticipating higher risk of the same issues ahead.