Housing is at the root of many of the rich world’s problems (2020) • Hacker News Board

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

#201

Post by aluminussoma » Wed, Aug 17, 2022, 4:02 PM UTC

datacruncher01 wrote: post #132

It's a simple problem, we turned housing into an investment. Now everyone who owns a home is incentivized to ensure their investment is maximized and that results in a lot of NIMBYism. The simple solution is we need more housing in cities and suburbs. How we get there is an exercise that's taken on by local housing authorities and they are not incentivized to solve the problem. That's because they work for voters who…

I wonder if persistently low interest rates is the real culprit that led to housing as investment. I have been recently intrigued by FinTwit arguments that an excess of demand spurred by too low interest rates is the real reason for many shortages. As a saver, that argument naturally appeals to me.

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

#202

Post by skybrian » Wed, Aug 17, 2022, 4:02 PM UTC

sfe22 wrote: post #169

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. W…

If you can defer taxes long enough, deferring taxes is avoiding them.

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

#203

Post by goodpoint » Wed, Aug 17, 2022, 4:03 PM UTC

axg11 wrote: post #141

datacruncher01 wrote: post #132

It's a simple problem, we turned housing into an investment. Now everyone who owns a home is incentivized to ensure their investment is maximized and that results in a lot of NIMBYism. The simple solution is we need more housing in cities and suburbs. How we get there is an exercise that's taken on by local housing authorities and they are not incentivized to solve the problem. That's because they work for voters who…

When was housing not an investment? Throughout history, people have always wanted to drive up the value of their land and properties. There are still plenty of places in the US/Canada/UK where housing is cheap. The problem is that nobody wants to live in those areas.

Almost never. Housing has always been a basic necessity for survival.

Only when feudal societies developed you had landlords and serfs and that's hardly something to be proud about.

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

#204

Post by throwaway0a5e » Wed, Aug 17, 2022, 4:04 PM UTC

sudosysgen wrote: post #138

datacruncher01 wrote: post #132

It's a simple problem, we turned housing into an investment. Now everyone who owns a home is incentivized to ensure their investment is maximized and that results in a lot of NIMBYism. The simple solution is we need more housing in cities and suburbs. How we get there is an exercise that's taken on by local housing authorities and they are not incentivized to solve the problem. That's because they work for voters who…

This can probably be solved at the federal level using smart taxation and incentives for mixed zoning.

The hubris is astounding.

You know how we got into this problem? Decades ago we used taxation and law to try and incentivize the development we wanted and disincentivize or prohibit what we didn't. And today the efficacy of that endeavor is obvious to even the most casual observer.

There is no compelling reason doing the exact same thing will work better for different values of "development we want" and "development we don't". Have you seen what gets developed when you incentivize mixed development? It's lifeless crap compared to the places that were built up prior to the advent of widespread usage restrictions on land where development happened organically without the input or prior approval of local government (i.e. people were basically free to do whatever within the permissive limits of the time).

How about we just get the government out of the business of telling people what and where they can and can't build. Let people develop what they think there is demand for. A few inappropriate industrial sites is a small price to pay for allowing pent up demand for residential and commercial construction to be satiated.

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

#205

Post by soared » Wed, Aug 17, 2022, 4:04 PM UTC

bobthepanda wrote: post #197

obblekk wrote: post #179

Have we considered just building new cities? It would be cool if the state could run a contest, have a rural county sign up to reform their zoning laws, and in exchange receive 100 year tax relief guarantees from the state to build a new city. America used to build new cities from scratch all the time up until WW2. This creates competition between cities (new entrants) resulting in better policies all around. And the…

Most cities are where they are because all the good spots have been taken. Any new significant city will need billions if not tens of billions of dollars on transport links, water, sewer, etc, if there is even a way to bring a city sized amount of potable water. And then you have to convince people to actually move their residences and jobs there. Most people don‘t like betting uprooting their whole family and social…

Cities are where good spots were x years ago, where x is somewhere between 300 and 100. The world is different with transportation/etc and the good spots don't look the same. See the flood of people to small mountain towns during covid. They weren't the best places before because they were hard to get to and from, but with highways, small airports, fiber internet, etc they are in many ways better than cities.

With enough investment in new roads and infrastructure we could easily build a huge city in Summit County, Colorado.

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

#206

Post by [deleted] » Wed, Aug 17, 2022, 4:05 PM UTC

mminer237 wrote: post #192

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 don't write off your rental income. You depreciate the rental property over 27½ years and write that off against your rental income. Few rental properties will have under a 3.7% ROI where depreciation would cover all the income. At best you might be paying half tax. In your example, you'd pay no tax, but you'd lose out on the potential income you could have had with better investments (and lose about 6 years' wor…

[deleted]

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

#207

Post by seydor » Wed, Aug 17, 2022, 4:05 PM UTC

mildmotive wrote: post #178

seydor wrote: post #156

> Happily, they are at last starting to recognise the damage caused by these policies. No, nothing changed, if anything it got worst post covid. The only countries that can do something are singapore and china, who are rationally treating housing as a basic need similar to food. In the western world things will probably never change on that front. The boomers built houses because they knew they d be appreciating fore…

> The only countries that can do something are singapore and china, who are rationally treating housing as a basic need similar to food. So why are people in China paying hefty loans for apartments that haven’t even been constructed yet? And now due to the housing bubble popping, construction has halted in so many parts of China that there is an epidemic of Chinese people who are refusing to pay their mortgages, and…

All i can hear is "housing prices fall for 11 straight month" . That's like music for westerners.

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

#208

Post by pessimizer » Wed, Aug 17, 2022, 4:05 PM UTC

datacruncher01 wrote: post #132

It's a simple problem, we turned housing into an investment. Now everyone who owns a home is incentivized to ensure their investment is maximized and that results in a lot of NIMBYism. The simple solution is we need more housing in cities and suburbs. How we get there is an exercise that's taken on by local housing authorities and they are not incentivized to solve the problem. That's because they work for voters who…

> Now everyone who owns a home is incentivized to ensure their investment is maximized and that results in a lot of NIMBYism.

This motivation is backwards. Getting zoning restrictions around your house removed multiplies the value of that house. NIMBYism comes from places where people live. YIMBYism maximizes property values, although there's an element of blockbusting because overbuilding and a change in neighborhood character can make a neighborhood so unpleasant to live in that holdouts will end up selling cheap.

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

#209

Post by goodpoint » Wed, Aug 17, 2022, 4:06 PM UTC

the_gastropod wrote: post #129

refurb wrote: post #56

Earlier quoted context omitted.

But this isn’t true. Median income and median wealth has been on a general upward trend for over a century. I mean, how do you think the Western world become so wealthy? How did China raise tens of millions out of poverty. Capitalism!

This all-or-nothing thinking is, itself, a problem. Capitalism is a tool. And it's good at many things. Creating competition and innovation in consumer goods is one area it's obviously very good at. It is not good at equity. Externalities are a massive problem raw capitalism has no affordance for addressing. Regulations (another tool) are necessary to smooth out capitalism's rough edges. You'll find very few people t…

> Creating competition and innovation in consumer goods is one area it's obviously very good at.

Not really.

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

#210

Post by ghaff » Wed, Aug 17, 2022, 4:08 PM UTC

Loughla wrote: post #194

ghaff wrote: post #189

Earlier quoted context omitted.

Well, I get a form every year from my town to confirm my particulars. I sign it and send it back. I guess if I weren't registered I'd go down to the town hall and do so. If I couldn't for some reason, I assume I could call the town clerk, and they'd send me a form in the mail. When I go into Cambridge around election time, I frequently see various tables set up to register people. Obviously registering (and voting) i…

>I guess if weren't registered I'd go down to the town hall and do so. What if your job wouldn't let you off during the town hall's regular hours? What if you don't have transportation? What if you don't have the necessary forms of identification? > I assume I could call the town clerk, and they'd send me a form in the mail What if you're not already registered and cannot just fill out a form to send in? What if you…

As I wrote, it's doubtless harder for some than others. But, yes, I do think in general most people who don't get registered would probably (for perhaps understandable reasons) decide that it's too much of a burden to vote as well. If it's literally impossible for someone to get registered, it's probably equally impossible to vote anyway.