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

economist.com

341–350 of 817 posts

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

#341
post #271

Earlier quoted context omitted.

As a young person (28), I think it’s because we feel powerless in the face of what is to come. Young people have no power because we largely are in the renter and working classes; while the home and business owners fight against every mention of renter protections, increased housing, worker protections, etc. Not to mention we see the world we are growing up into is quickly becoming more and more inhabitable while liv…

The millennials are the largest voting block in the US. What is everyone else supposed to do when the group with the most voting power "feels" powerless? I sure hope millennials are just late bloomers. Where are the great political leaders, engineers, scientists, artists and writers from the millennial generation? All these future problems are hard but solvable when there are people working to solve them.

> the group with the most voting power "feels" powerless?

It seems like a strange thing to have powerless concerns about as voting only selects a representative. In my experience, the most likely candidates are all reasonably suited to the job, leaving it to matter little who ultimately wins. Even if you are powerless it is not that big of a deal, being the most inconsequential part of the process.

The real work happens after the vote has taken place when you have to start engaging with the selected representative on the regular to make your perspective known. It is guaranteed that you didn't elect a mind reader. It is not clear if the younger generations are aware of that. This may be why they feel powerless.

It my youth the message was always "contact your local representative", but in recent times that message has changed to "how could do this to us?" There is some apparent degree of learned helplessness at play; perhaps because greater media exposure gives us insights into places with strong dictatorships and we project their conditions upon ours.

Invariably, those with enough land ownership ties will ultimately run into municipal issues that will require approaching council, at very least forcing a deeper understanding of government upon them. This may also help explain why those who own things are apparently more engaged politically.

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

#342

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…

This is interesting. I wonder if it would work to make all FHA loans be required to be NEW properties/units. So the only way to get access to the money is to expand the housing. I'm sure there are consequences but I need to think them through a bit more.

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

#343

Earlier quoted context omitted.

The bulk of feudalism took place between the 5th and 12th centuries, ~400 years before 1491.

Sure, and the legacy of feudalism is a core part of what informs Western philosophy and political structure since then.

Yes. Its post 1492* relevance through its legacy now established, we revolve back to the point:

- The last thousand some years (in Europe)

- Widespread (in Europe)

- Half of recorded (European) history

You may have misread my original comment, the “limited effect” was to describe Europe’s influence at that particular point in time, not feudalism/Europe’s influence since then.

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

#344

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…

I think taxes stopped making sense since 1971 when the USD became a fully fiat currency.

if the government can print money, what's the point of collecting money through taxes?

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

#345

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…

>I understand a key part of communism is you and your family own nothing

No it isn't.

https://www.workers.org/private-property/

>Private property, to a communist, is not your shoes or toothbrush, or even your house.

>Those things are called personal property and under socialism and under communism they continue to belong to workers in much the same manner as they do now.

Criticize people for what they actually believe, not what you imagine they believe.

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

#346

Earlier quoted context omitted.

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

When you effectively take someone's home for government benefit. People think that when they buy property they own it. You're model is more the China version. You don't own property, you only lease it from the government. Hence, your model looks more like the communist model than the traditional Western one.

>When you effectively take someone's home for government benefit.

You mean like how all the Interstate Highways got built? Except that wasn't "effectively", it was literally.

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

#347

Earlier quoted context omitted.

This is already the case. You can only depreciate the building value not the land portion. So single family homes have much lower depreciation since most of the value is typically in the land vs an apartment which is the opposite.

In paper, but we constantly underestimate the value of land.

You can't just make up the value of the land. It's pretty easy to figure out unlike say a business.

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

#348
post #344

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…

I think taxes stopped making sense since 1971 when the USD became a fully fiat currency. if the government can print money, what's the point of collecting money through taxes?

Taxes creates demand for USD (an artificial way of giving fiat USD "value")

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

#349

Earlier quoted context omitted.

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…

As a home-owner not landlord (I am against the idea of owning more property than my family will use) I WISH I could write off half of my property tax.

I wish I could write off all my personal expenses as business expenses. But I understand why the laws are written such that I can't

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

#350
post #344

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…

I think taxes stopped making sense since 1971 when the USD became a fully fiat currency. if the government can print money, what's the point of collecting money through taxes?

Countries that try to print money instead of collecting taxes usually end up with pretty bad inflation.
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