Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Making housing more affordable means your home's value will have to come down

theglobeandmail.com

Post reply on HN
Print view View original

111–120 of 192 posts

Re: Making housing more affordable means your home's value will have to come down

#111

Post by CuriouslyC »

kiba wrote: post #21
CuriouslyC wrote: post #3

Why do new homes have to be built in competition with existing homes? With remote work and the digital elite moving wherever, why not just pop up new developments wholesale, complete with shopping and services somewhere out of the way and cheap?

That's how we get urban sprawl in the first place, and it is not a working strategy in the long run. Cities benefit from high urban density, and reducing density means less benefit.

Cities are trash in my opinion. I don't want to live in a city. I'm happy to visit them once every few months, enjoy the cream of the crop of their culture, then leave and forget about them. It's not worth enduring the constant bullshit, traffic, $10 coffee and $20 cocktails so that you have instant access to culture, the mid live culture that's on offer half the time is less appealing than internet content I could consume from anywhere and taking a trip for a special occasion is fun.

Cities used to be where young folks found a job and a mate. The job part isn't such a thing anymore due to remote work but I can still see the appeal of a place like NYC if you're trying to find someone.

Re: Making housing more affordable means your home's value will have to come down

#112

Post by CuriouslyC »

LargeWu wrote: post #4
CuriouslyC wrote: post #3

Why do new homes have to be built in competition with existing homes? With remote work and the digital elite moving wherever, why not just pop up new developments wholesale, complete with shopping and services somewhere out of the way and cheap?

You've just invented suburbs.

suburbs aren't designed to be mostly self sufficient.

Re: Making housing more affordable means your home's value will have to come down

#113

Post by CuriouslyC »

tifik wrote: post #8
CuriouslyC wrote: post #3

Why do new homes have to be built in competition with existing homes? With remote work and the digital elite moving wherever, why not just pop up new developments wholesale, complete with shopping and services somewhere out of the way and cheap?

Places like that already exist. They are called towns. Problem is most people want to live in large urban centers.

Do they though? Last I checked urban centers were doing poorly and exurbs of up and coming mid sized cities were all the rage.

Re: Making housing more affordable means your home's value will have to come down

#114

Post by throwaway1105q »

mrcode007 wrote: post #91
throwaway1105q wrote: post #83

Earlier quoted context omitted.

Not sure how is an accounting book relevant. I'd rather ask a tax consultant - the definitions are slightly but significantly different. Anyways, even by your book's definition - later sale for a higher price is economic benefit, protection against inflation is one too. This link considers your viewpoint too: https://www.investopedia.com/terms/a/asset.asp

I’m trying to say that under mortgage, a property isn’t your asset. It’s a bank’s asset. The mortgage is booked under asset side on the balance sheet of the bank. It cannot be booked as an asset on your side. The economy wouldn’t balance. Until you actually paid off stuff the home is a liability. You pay money on it every month (negative cash flow) and that cash flow accrues to the bank (positive cash flow). I don’t…

The loan is a liability (and an asset on the bank's side) but the house itself is your asset and is treated as such. You pay capital gains tax on sold assets even if you used a loan to obtain them. For individuals there are exceptions to that specific to real estate, but corporations definitely do. It's not an asset only if it's actually owned by the bank - such as a car or machine on leasing.

I'm not an accountant either but my company has some assets we paid for with a loan, so this is a situation I know.

Re: Making housing more affordable means your home's value will have to come down

#115

Post by happytoexplain »

voisin wrote: post #92

The only solution to the housing affordability crisis palatable to current homeowners is to build many new homes of a totally different type that can not be readily substituted. This is already happening where new housing tends to be denser, stacked (apartments) or closer together (row houses). Of course there is some overlap, but to the extent overlap and substitutability can be minimized, current homeowners can enj…

>homes of a totally different type that can not be readily substituted

Can you explain what this means? What does "substituted" mean in this context?

Re: Making housing more affordable means your home's value will have to come down

#116

Post by CuriouslyC »

LargeWu wrote: post #86
pavpanchekha wrote: post #7

Earlier quoted context omitted.

People do not want to live out of the way. In fact there are quite possibly lots of homes already available out of the way and cheap; I've heard some countries like Italy and Japan give them away for nearly free.

You can get perfectly good 2000 SF, 4 BR homes in places like Fargo or Little Rock for $200,000. There are reasons housing prices in expensive areas are what they are. Some of it is poor zoning and land usage that suppresses supply, but a lot of it is also demand. People want to live in dense, vibrant areas, even if they could live cheaper elsewhere.

People don't care so much about living in dense and vibrant areas (as the pandemic migration showed) but living near jobs and affordable housing.

Re: Making housing more affordable means your home's value will have to come down

#117

Post by s1artibartfast »

Jensson wrote: post #110
s1artibartfast wrote: post #107

Earlier quoted context omitted.

Because the meme/myth about disposable Japanese housing comes from dense urban environments like Tokyo. It is largely a result of tax policy and construction methods between 1960-1990 where it made sense to gut apartments after they depreciated for tax purposes. In Japan, property tax decreases to zero over time, but resets if you upgrade it. There for people gut and remodel before selling their units so they get the…

> Because the meme/myth about disposable Japanese housing comes from dense urban environments like Tokyo. But then you should compare home size to something comparable, like Tokyo to New York city, not Tokyo to USA.

I Think I provided the appropriate comparisons given the premise:

"Why doesn't American real-estate behave like an exaggerated example of Japanese real-estate?"

The answer is of course that there are significant differences between the two groups being compared.

Re: Making housing more affordable means your home's value will have to come down

#118

Post by servus45678981 »

s1artibartfast wrote: post #82
ebiggs wrote: post #30

As a homeowner I see little benefit for me for the insane value of my home. Do I want to pay more in property taxes? No. If I sell it’s to just buy a different insanely priced home. I suppose I’m privileged in that I have other retirement plans so my kids will inherit my home - and that’s good I guess if they ever want to afford a home. Homes being an investment is the wrong mindset for a healthy society. Have cheap…

Homes are and should always be an investment because they are. They dont have to beat the stock market, but a well maintained home should track inflation at least. They have real and huge replacement costs in materials and labor. If my house burnt down, it would cost $1M to rebuild. Im all for cheap simple houses for those with less money. However, unless they are so cheap as to be disposable, they too will be invest…

I think it would be the best if everyone was forced to live in a flat, which size is determined by the number of people living in that Appartement. It is cool for you that your house is valued at 1 million; that proves my point even more. A house shouldn‘t be an Investment, but your education.

Re: Making housing more affordable means your home's value will have to come down

#119

Post by servus45678981 »

ElectricBoogie wrote: post #13

Well, I'm against affordable housing then. Let Blackrock, who bought over 40% of the single family homes on the market, take it on the chin. Perhaps we can do a fire sale of corporate-owned homes. This has made me determined to fight affordable housing even more so. I'd also like to ask, why is British journalism so shit tier? It's a fucking joke.

I hope you will pay more property taxes…

Re: Making housing more affordable means your home's value will have to come down

#120

Post by s1artibartfast »

leereeves wrote: post #105
s1artibartfast wrote: post #88

Earlier quoted context omitted.

I dont know what point you are trying to make, but housing prices fluctuate all the time. I am talking about long term averages.

So am I. The median home price rose from 221k in Q4 2011 to 442k in Q4 2022. That's doubling in 11 years, thus rising 6.5% per year on average over the long term. https://fred.stlouisfed.org/series/MSPUS Over the same time period, the value of existing homes, as measured by the Case-Shiller U.S. National Home Price Index (which measures the price of repeat same home sales) more than doubled. https://fred.stlouisfed.o…

I still don't know what point you are trying to make or refute.

If you asking why I think it is completely unrealistic to expect a 50% decline on a short timeline, there are tons of reasons. You have to ask why housing prices doubled, and ask how easy or likely those underlying conditions are to reverse.

1) First, US GDP/capita went up by 60% in those 11 years.[1]

2) Similarly, US inflation in those 11 years was 40% [2]

3) US urban population increased by 25 million in those 11 years [3]

4) Construction costs/sqft are up about 90% in those 11 years [4]

5) More generally, Most Americans have 30 year fixed rate mortgages. This means they can and will avoid selling at a loss, so prices are sticky.

These are all factors without "quick fixes". Slow change can happen, but the fundamentals are sticky. If my house burnt down, it would cost $1M in materials and labor to replace.

https://fred.stlouisfed.org/series/A939RC0Q052SBEA

https://www.usinflationcalculator.com/

https://www.statista.com/statistics/985183/size-urban-rural-...

https://www.mortenson.com/cost-index

Post reply on HN