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

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

#161

Post by jjav »

grecy wrote: post #159
jjav wrote: post #145

Earlier quoted context omitted.

> It is impossible for housing to be simultaneously a good investment and affordable. This is one of those meme-phrases that no longer really means anything. > Policymakers simply have to decide if they cater to those that already own homes, or those desperately wanting to buy one. What exactly would you propose this means? A house is always going to appreciate over the long haul on average, simply due to inflation.…

> This is one of those meme-phrases that no longer really means anything. It means exactly what it says it means. You can either making residential housing something that regular people earning regular salaries can afford to purchase, or you make it a vehicle for investment to grow money, so that rich people, and companies and brokerages and all the rest want to park their money there so that it will grow rapidly. >…

> Policymakers could decide to implement laws to limit how much of an "investment" housing can be.

How, exactly?

> Obvious choices are limiting houses to only be owned by humans, limiting how many each human can have

These are great and I fully support such rules. They will not make houses depreciate though. They'll make more of them owned by regular people instead of rental conglomerates, which is a wonderful outcome. But it won't make them depreciate.

> penalties (tax or otherwise) for trying to "make money" from owning residential housing

You make money from owning housing merely by owning and living in it. How are you looking to punish homeowners?

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

#162

Post by s1artibartfast »

snapplebobapple wrote: post #147
s1artibartfast wrote: post #82

Earlier quoted context omitted.

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…

This is incorrect. If they are an investment then they should go up and down in relation to the value of being able to live wherever the property is. The big issue now is all places (but some more than others) are artificially constraining supply with excessive regulation and restriction on what one can do with their property. We need to largely get rid of that excessive regulation (i.e. much less strict zoning allow…

I agree with the first part of what you said, but disagree with your closing comment. I think a lot of people underestimate how significant construction costs are. I planned was infinite and there were no zoning regulations, my home would only give up like a third of its value.

Materials and labor are a huge component of housing prices

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

#163

Post by snapplebobapple »

s1artibartfast wrote: post #162
snapplebobapple wrote: post #147

Earlier quoted context omitted.

This is incorrect. If they are an investment then they should go up and down in relation to the value of being able to live wherever the property is. The big issue now is all places (but some more than others) are artificially constraining supply with excessive regulation and restriction on what one can do with their property. We need to largely get rid of that excessive regulation (i.e. much less strict zoning allow…

I agree with the first part of what you said, but disagree with your closing comment. I think a lot of people underestimate how significant construction costs are. I planned was infinite and there were no zoning regulations, my home would only give up like a third of its value. Materials and labor are a huge component of housing prices

if your house is currently a million dollars then dropping in value by a third is roughly the difference between needing 220k a year of income to buy it or 156k a year of income to buy it. it's a 96th percentile income house vs a 92nd percentile income house, which makes it an affordable house to many millions more people.

That being said. I agree that labor and materials are a huge part. However, a large part of the labor and materials cost is itself driven by regulation and should decrease in a less regulated environment (everything from elimination of wasted trades time caused by regulators to it being much easier for startups in 3d printing, factory line production, etc. should drive costs down), Further, elimination of mundane but expensive required details like minimum parking requirements, multiple fire escapes in low rise smaller developments limiting floor plan design (while being unnecessary due to improvements in fire suppression), minimum suite sizes,etc, etc. should drive more right sized development to areas that are currently overheated, pushing prices down.

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

#164

Post by r-s »

dave333 wrote: post #148

Government policy is hugely biased towards homeowners and against renters. It would be more equitable to help renters more, perhaps by helping them become (first-time or partial) homeowners. Two schemes: 1) Government could put up down payments for first-time buyers in exchange for say 50% of the home equity. Buyers obtain a normal mortgage loan. Such buyers can optionally pay back the down payment over time and get…

https://www.cmhc-schl.gc.ca/consumers/home-buying/first-time... The Canadian government did try a similar strategy for a bit (although I think it maxed out far below 50%). It was discontinued recently.

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

#165

Post by Gibbon1 »

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…

There are negative benefits to high housing prices. It's the most illiquid asset type. If you sell it where are you going to live? At the same time high rents drive up the price of goods and services you need to pay for.

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

#166

Post by Fire-Dragon-DoL »

happytoexplain wrote: post #124

I can't speak for the urban situation, but I don't care about my home value (to a point). I care about the quality of my community. I care about that a lot . Dense housing put in an area that isn't dense just because the area is high-demand is often not productive in the long run, as the effects it can have on the existing community range from nothing (a net positive though, since now there's more housing) to abject…

Yeah, that's how we got here though. The solution is taking that high demand area and replace all low density homes with high density ones

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

#167

Post by Fire-Dragon-DoL »

dave333 wrote: post #148

Government policy is hugely biased towards homeowners and against renters. It would be more equitable to help renters more, perhaps by helping them become (first-time or partial) homeowners. Two schemes: 1) Government could put up down payments for first-time buyers in exchange for say 50% of the home equity. Buyers obtain a normal mortgage loan. Such buyers can optionally pay back the down payment over time and get…

In Canada it's based toward landlords, not homeowners. If I own the home I live in, I have tax disadvantages over renting. If I rent my property to somebody else, I can write off way more things like the mortgage interest portion.

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

#168

Post by s1artibartfast »

snapplebobapple wrote: post #163
s1artibartfast wrote: post #162

Earlier quoted context omitted.

I agree with the first part of what you said, but disagree with your closing comment. I think a lot of people underestimate how significant construction costs are. I planned was infinite and there were no zoning regulations, my home would only give up like a third of its value. Materials and labor are a huge component of housing prices

if your house is currently a million dollars then dropping in value by a third is roughly the difference between needing 220k a year of income to buy it or 156k a year of income to buy it. it's a 96th percentile income house vs a 92nd percentile income house, which makes it an affordable house to many millions more people. That being said. I agree that labor and materials are a huge part. However, a large part of the…

>if your house is currently a million dollars then dropping in value by a third is roughly the difference between needing 220k a year of income to buy it or 156k a year of income to buy it. it's a 96th percentile income house vs a 92nd percentile income house, which makes it an affordable house to many millions more people.

Another way to put this is it would set house prices back by 3-4 years, which is where I was coming at it from.

I do think there is a lot that should be done on the regulatory front, so that more people can own, and more people in general can have roofs over their head.

I think it is despicable that we as a society have enacted things like minimum unit size while there are homeless people struggling to find housing. I think there should be basically no regulations for owner occupied homes, and the bare minimum safety standards for rentals. IF someone wants to rent a 10x10ft cinderblock cell to live in, they must really be struggling, so why the hell would we want to make things harder for them.

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

#169

Post by syntactile »

HDThoreaun wrote: post #123
bilsbie wrote: post #32

I think it’s weird we haven’t made any new cities in what, 100 years? We just keep trying to crowd into existing places.

We settled the best spots already. There are huge economic returns for living in an urban area with other people, so its hard to bootstrap new cities. I think it would basically require starting as a company town. Epic medical records sort of did this in Madison

Epic has had a significant influence on Madison's economy but I'm pretty sure hosting one of the country's larger universities and state government have played a greater role in its growth than any private investments. It's Madison's consequently vibrant culture that makes its housing competitive.

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

#170

Post by syntactile »

CuriouslyC wrote: post #116
LargeWu wrote: post #86

Earlier quoted context omitted.

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.

I'd argue the pandemic rural flight exemplified precisely how much everyone values the vibrance and density of cities: when quarantine put a pause on the vibrance and nullified employment proximity, everyone had only affordability to select for. And when the vibrance returned, so did the residents. https://ncrc.org/the-washington-post-americans-are-returning...
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