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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)

#261

Post by dkarl »

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…

This is a really counterproductive take, not because of the ways it's wrong about how rental income works, but because it paints a completely wrong-headed picture of whose interests are opposed to progress. People who own property they don't live on stand to make a lot of money under policies that allow them to build more and build denser. It's homeowners who are opposed.

EDIT: Lots of propaganda in these comments painting individual homeownership as the cure for our housing crisis. It's not. It's the cause.

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

#262

Post by dcolkitt »

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 cannot be solved from the federal level.

I disagree. The federal government invests enormous resources into subsidizing home ownership. Everything from Fannie Mae guaranteeing mortgages to not taxing home owners on the imputed value of rent.

And I think that's all well and good, home ownership has many positive externalities. But there's zero point subsidizing demand for something when supply in inelastic. In those cases subsidies don't result in expanded supply, only increased prices. For example even if diamonds are good, it wouldn't make sense for the government to match first time diamond buyers payment, because the supply of diamonds is inherently limited. All it would do is drive up prices.

Modest proposal: the federal government should revoke all of its housing subsidies in any municipality that restricts the supply of housing. San Francisco would be more than free to continue to block development. But if it chooses to do so, then San Francisco home owners should no longer be eligible for Fannie/Freddie mortgages, no longer be able to tax deduct mortgage interest, and should have to pay income tax on the imputed rental value of their home.

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

#263

Post by dghughes »

doliveira wrote: post #95
alistairSH wrote: post #77

Earlier quoted context omitted.

Not sure why you're being downvoted. Whether it's intentional or not, voting in the US is not always easy for several reasons... 1 - No national election day holiday, so wage-earners often have to forgo income to vote. 2 - Long lines, too few voting stations, exacerbate point 1 3 - Inconsistent voting laws as you cross municipal boundaries (mostly state to state). 3b - particularly WRT mail-in/absentee ballots. 4 - c…

Election day not being a holiday in the USA is weird

It isn't in Canada either mostly I'd say because there's no set date. The government can lose a confidence vote and an election can be called at anytime (a date set in the future not immediate). But we do get a paid hour or two off work to go vote that's law.

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

#264

Post by dionidium »

wldcordeiro wrote: post #152
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…

One thing that's missed in the renter vs homeowner thing is that the rules of election systems favors the homeowner too. Renters move more and will need to register to vote over again and the added inconvenience will stop plenty from even bothering.

A commonsense way to describe what you just said is that homeowners are more stable and stationary and therefore more invested in the long-term future of their communities than renters are, which is an argument that urbanists laugh at, but one that seems very clearly to be true.

I think people basically know this, if they're allowed to be honest with themselves. Nobody who ever lived in a college dorm and then spent a "magical year" in NYC and then bought a house in a suburb thinks they were just as invested in those first two places as they are in the third.

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

#265

Post by malfist »

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 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

If your family is leaving you a house worth more than $12 million, you can afford to pay the tax man.

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

#266

Post by finiteseries »

horsawlarway wrote: post #227
goodpoint wrote: post #203

Earlier quoted context omitted.

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.

> feudal societies developed Sooo... the last thousand some years, given that feudalism was widespread by the 11th century (and housing was absolutely an investment before that). Basically - half of recorded history (~400bc for Europe), and longer than the United States has existed. I don't understand what you think this comment means...

- The last thousand some years (in Europe)

- Widespread (in Europe)

- Half of recorded (European) history

An exclusively European phenomenon, the bulk of which came and went while it was a backwater region with limited effect on the rest of the world.

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

#267

Post by namdnay »

namelessoracle wrote: post #216
namdnay wrote: post #173

Earlier quoted context omitted.

> 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. so if they can't afford to pay tax on the windfall, they'd have to sell the house and buy a smaller one. is that the end of the world? > Regarding the cost basis rest that is so people can upgrade their house without having to pay a tax bill what…

So a family on hard times should be forced to leave their grandmothers home when she dies and hope they can find a new one? Gentrification can easily push a property in the place they've lived their whole lives out of their price range. And the family home might not have been super well kept up so the "windfall" isn't as big as the property values in the area may reflect. This happens now with gentrification in big c…

In what universe does paying tax on what you inherit equate to communism?

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

#268

Post by pessimizer »

quatrevingts wrote: post #244
pessimizer wrote: post #208

Earlier quoted context omitted.

> 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 neighborhoo…

YIMBYism simultaneously raises prices (presumably for the greedy developers and sellouts) and lowers them (for the noble neighborhood defenders who are forced to sell). Got it.

I'm going to ignore your presumptions (your "greedy developers and sellouts) and things I did not say (like "YIMBYism lowers prices for noble neighborhood defenders who are forced to sell"), so basically every word and try to find the spirit of your comment.

It's pretty difficult to fit a massive apartment building on a house sized plot between two massive apartment buildings. The prices you will be offered are not what your neighbors were offered. There will also be pressure on you to sell because your neighborhood is now shit. Your house prices may still, all that being considered, have massively risen since you bought the house. The property taxes also rose proportionally, sucking away your equity.

Any reply to this other than vague sarcasm?

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

#269

Post by valarauko »

Loughla wrote: post #176
Spivak wrote: post #140

Earlier quoted context omitted.

Not being able to vote electronically is also really weird since ballots are only paper at the edge. Yes there are downsides, just like when you mail-in you give up non-repudiation, but the fact that it's not even an option is crazy. I personally would be more than happy to give up my personal ability to vote anonymously if I meant I could just sign up for a vote.gov account at the BMV, login, vote and be done with i…

I absolutely do not want electronic voting. I legitimately believe that system would be kept behind a black box, and would be far too likely and liable to be cheated and gamed. At least with a huge stack of paper that is stored for an approved number of years there is an option for independent verification.

The Indian system is a hybrid model - you vote through an electronic machine which also prints out a confirmatory paper vote that you can confirm through a porthole and which drops into a strongbox. In case of conflict or concerns, the paper votes can be tallied.

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

#270

Post by colinmhayes »

fezfight wrote: post #185
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…

So I think folks overlook just how wealthy certain investors are when they propose the fix is to just build new properties. Those will also get snapped up by investors. To fix the problem, investing in housing needs to be either banned or made very unattractive. You only need one house to live in.

If there's enough housing it doesn't matter who owns it. Unless units are being held vacant by landlords (they're not atm) housing prices will reach an equilibrium that represents the value they provide. Landlords can't just unilaterally raise prices without lowering supply levels.
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