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Housing is at the root of many of the rich world’s problems (2020)

economist.com

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Re: Housing is at the root of many of the rich world’s problems (2020)

#161

Post by AlexandrB »

kindatrue wrote: post #151

I just think about this letter to the Atherton (median sold home price: $7.6M) Mayor and City Council: === Subject line: IMMENSELY AGAINST multifamily development! I am writing this letter to communicate our IMMENSE objection to the creation of multifamily overlay zones in Atherton … Please IMMEDIATELY REMOVE all multifamily overlay zoning projects from the Housing Element which will be submitted to the state in July…

What gets me is the dramatic language. I don't think home values would "massively" decrease with a few multi-family residences in the area. What's funny too is that even if they did, the Andreessen family is one that could easily afford to eat the loss.

Meanwhile no one blinks twice when home prices increase 20% over just a few years and put housing out or reach of even more families.

Re: Housing is at the root of many of the rich world’s problems (2020)

#162

Post by refurb »

idkyall wrote: post #122

Housing in the US has gotten to where it is due to horrible laws effectively allowing total tax avoidance for landlords. Take some investment property. You buy it at some basis price, let's say 500k. You rent it out for 15k a year. Each year you can offset your rental income against deprecation of the property and property taxes - meaning, you pay no income tax on your rental income. ~30 years later, you've deprecate…

You’re ignoring depreciation recapture which can have significant tax implications even with a 1031 exchange. It basically claws back the depreciation you used to offset rental income.

Re: Housing is at the root of many of the rich world’s problems (2020)

#163

Post by reedjosh »

29athrowaway wrote: post #107
rowanG077 wrote: post #103

Earlier quoted context omitted.

So your point is we need to keep people in such shitty situations they won't want to bring kids into this world?

My point is that the system is overcapacity, that's the reality you like it or not. If you want to watch Netflix and forget about what's happening outside, that's your choice. But we are completely destroying this planet in every way. There are lots of mouths to feed every day depending on systems that are not sustainable and may collapse. https://www.youtube.com/watch?v=RjsThobgq7Q If you go camping and have limited…

I find it funny that I agree with you in some ways that others might not.

For example, I agree people should ditch the dumb super hero movies and do something better. Maybe garden or learn to weld or something.

But I completely disagree with you that humans are destroying the planet in an unsustainable way.

Sure, there are huge challenge and excesses, but the human spirit should also bring solutions.

Particularly in the face of both energy and water shortages, we should be building coastal nuclear plants.

Not only do they provide clean energy, but they basically function as desalination plants.

That and it's pretty glib to make people "uncomfortable" so they don't procreate. Especially when here in the US we barely even have population growth.

Re: Housing is at the root of many of the rich world’s problems (2020)

#164

Post by nostrademons »

mrep wrote: post #127
anovikov wrote: post #83

Earlier quoted context omitted.

I think you are more than exaggerating. Thinking of someone who's 65 now and owns several homes, these people are utter fools. How much would money put into houses 40 years ago when they bought, and put into stocks at the same time, would make? You don't even need to google up to know the answer. SP500 would make 96x with dividends reinvested and 37x without. Median home price is not even 10x, and the median home has…

Actually, you do need to google up if you want to look at an actual data analysis. I mean, you aren't even counting the rental income in your comparison. If you look at the rate of return on everything from 1870-2015, equity markets and housing actually provide somewhat similar returns [0]. Equity markets are far more liquid though so I choose them personally. [0]: https://news.ycombinator.com/item?id=19817584

The equivalent to rental income is "with dividends reinvested". Dividends are the cash flows from owning a stock, just like rent is the cash flow from housing. So the 10x capital appreciation from housing is equivalent to the 37x capital appreciation from the S&P 500.

You and anovikov reach different conclusions because you're looking at different time scales. You're citing returns from 1870-2015; he's citing returns for the last 40 years, 1980-2020. The comment and paper you linked itself explains why: housing and equity returns were very comparable from the period 1870-1945, but equities significantly outperformed from 1945-present. I would bet on suburbanization as the cause: the U.S. embarked on a massive homebuilding project from 1945-2000, which kept supply high and prices relatively low during that period. Returns to housing since 2009 (when the bottom fell out of the homebuilding market) have much more closely matched equities.

Re: Housing is at the root of many of the rich world’s problems (2020)

#165

Post by reedjosh »

rowanG077 wrote: post #146
29athrowaway wrote: post #107

Earlier quoted context omitted.

My point is that the system is overcapacity, that's the reality you like it or not. If you want to watch Netflix and forget about what's happening outside, that's your choice. But we are completely destroying this planet in every way. There are lots of mouths to feed every day depending on systems that are not sustainable and may collapse. https://www.youtube.com/watch?v=RjsThobgq7Q If you go camping and have limited…

Keeping people in misery is not the solution. Population control is much less ethically challenging IMO.

Again assuming a solution is even needed when birth rates in first world nations is already low.

Re: Housing is at the root of many of the rich world’s problems (2020)

#166

Post by adamsmith143 »

idkyall wrote: post #122

Housing in the US has gotten to where it is due to horrible laws effectively allowing total tax avoidance for landlords. Take some investment property. You buy it at some basis price, let's say 500k. You rent it out for 15k a year. Each year you can offset your rental income against deprecation of the property and property taxes - meaning, you pay no income tax on your rental income. ~30 years later, you've deprecate…

Little wrinkle in your calculation is that 15000 in rental income doesn't even cover half of your Mortgage + Property Tax bill.

Re: Housing is at the root of many of the rich world’s problems (2020)

#167

Post by seydor »

black_13 wrote: post #29

The economist can always find time say something negative about Pickety

Which is odd because piketty's data are entirely in line with the message of the article: overconcentration of wealth and prices going up. And Piketty has the 'solution' as well: the only times when inequality violently decreased was during world wars. I'm not sure how we can go about having one

Re: Housing is at the root of many of the rich world’s problems (2020)

#168

Post by anonymousDan »

"In Britain the government now openly says that the housing market is “broken"". The day this government does anything to fix the underlying problems with housing in the UK instead of being in the pocket of developers will be a cold day in hell.

Re: Housing is at the root of many of the rich world’s problems (2020)

#169

Post by sfe22 »

idkyall wrote: post #122

Housing in the US has gotten to where it is due to horrible laws effectively allowing total tax avoidance for landlords. Take some investment property. You buy it at some basis price, let's say 500k. You rent it out for 15k a year. Each year you can offset your rental income against deprecation of the property and property taxes - meaning, you pay no income tax on your rental income. ~30 years later, you've deprecate…

It is easy to pick an example like this to show the “bad” sides. But what is the alternative? If people had to pay inheritance tax on their family home, how many could not afford such a tax bill and would have to get rid of their family home to please the tax man.

Regarding the cost basis rest that is so people can upgrade their house without having to pay a tax bill. This is just deferring the tax not avoiding it. Without this it would be much harder to get a bigger house once you have kids. Most people would have a harder time moving and removing this would lower our quality of life.

Re: Housing is at the root of many of the rich world’s problems (2020)

#170

Post by Loughla »

marto1 wrote: post #136
pochekailov wrote: post #14

Nothing will change while the homeowners have more political power than the renters. Even in the cities where the renter population is bigger than the homeowners, such as in Seattle, half of the votes come from people of > 65 years old (all of whom are homeowners, likely more than one home). Young people simply won't vote at all. There is very little incentives for the young people to vote. Even if you cancel all the…

All this is true, but you missed a crucial piece, addressing your "need to engage" - political energy capacity coming from the young. I'll be more than glad to be proven wrong, but I don't think young people have driven any sort of political change in the west for at least the last 20 years. There are many cases where they get used as a lever, but actual movements like "occupy wallstreet" got squashed fairly fast.

100% accurate. While popular society takes small steps forward in regard to social and political changes, the actual politics has not changed from when I was a kid.

There are more politicians willing to admit they support gay people, I guess. But that's about it. Deep down where it counts - fiscal policy - nothing changes.

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