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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)

#401

Post by jbay808 »

notch656a wrote: post #369
Jiro wrote: post #337

Earlier quoted context omitted.

In that situation, the value of all cars went up, both new and used. The value of a used car was still much less than the value of a new car, you just didn't notice this because new cars didn't have their prices raised to correspond to the increased value.

That's not true, I could show you offers of my used truck being worth more than a brand new truck of the exact same generation of model in the exact same configuration. Used vehicle prices went insane during covid as the irrational market and places like Carvana paid more for your used car once it's off the lot. I almost wonder if people overbought into the "new car must be more expensive" paradigm so they forgot new…

I thought it was that new cars had long lead times attached to them. Was that not the case?

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

#402

Post by carom »

TaylorAlexander wrote: post #364
pdonis wrote: post #302

Earlier quoted context omitted.

> I hate to go all "citation needed" on you, but I'm not sure this is true. Given the number of people that rent in large cities all over the world for their entire lives, I don't know why you would find my claim doubtful. Many people seem to want to live in large, densely populated areas, and for most people that is always going to mean renting. > Much like freedom of car-free movement, housing ought to be a fundame…

> Many people seem to want to live in large, densely populated areas, and for most people that is always going to mean renting. The "for most people that is always going to mean renting" is that part that we could change through large scale collective policy. That's what Singapore has done for example. No one doubts whether people want to live in cities. We are asking whether the model of private landlords is the bes…

We do not need to hand over ownership to the government to build more houses. Just simplify zoning laws. Private landlords want to build. People want to maximize the value of their properties. They can't because of zoning laws that favor single family home hellscapes.

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

#403

Post by dgs_sgd »

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…

But this only works as long as the property's price is depreciating. Don't property prices generally trend up over time?

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

#404

Post by pas »

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.

Vacancy rates are low, investors don't just sit on the units.

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

#405

Post by [deleted] »

happiness_idx wrote: post #293
mminer237 wrote: post #192

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.

[deleted]

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

#406

Post by carom »

TaylorAlexander wrote: post #252
pdonis wrote: post #223

Earlier quoted context omitted.

> You only need one house to live in. Many people do not want to own a home, they would rather rent. Someone has to be the landlord for all those people, and to all those someones, the home is an investment. You can only get rid of homes as investments if you get rid of renting.

This line of reasoning is flawed. The government can build housing so that people have places to rent, in a way that isn’t “an investment” in the profit-seeking sense. That’s what they do in Vienna and it seems to work great. https://www.huduser.gov/portal/pdredge/pdr_edge_featd_articl... And then in Singapore they have very high home ownership rates, so we could also be dramatically reducing the number of people who…

Private parties can build housing too, if you let them.

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

#407

Post by notch656a »

jbay808 wrote: post #401
notch656a wrote: post #369

Earlier quoted context omitted.

That's not true, I could show you offers of my used truck being worth more than a brand new truck of the exact same generation of model in the exact same configuration. Used vehicle prices went insane during covid as the irrational market and places like Carvana paid more for your used car once it's off the lot. I almost wonder if people overbought into the "new car must be more expensive" paradigm so they forgot new…

I thought it was that new cars had long lead times attached to them. Was that not the case?

I'm sure that's a big factor.

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

#408

Post by foobarian »

japanuspus wrote: post #389
foobarian wrote: post #254

Earlier quoted context omitted.

Now the US is way ahead of the game here compared to Europe. There are no property taxes in most of Europe and families hang on to their homes for generations.

This appears to differ across Europe. I know for a fact (through living here) that Denmark and probably the rest of Scandinavia has property tax and inheritance tax -- holding on to family property is almost as expensive as buying new property. Which part of Europe are you referring to? I once had Greek colleague who complained about having to maintain three generations worth of houses, so that might be one place whe…

Right, Europe is bound to be diverse on this point. I have exposure to Balkan countries and the UK (which, while they do have non-zero rates, still have them far lower what I'm used to in New England).

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

#409

Post by UncleOxidant »

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…

A 1031 exchange also has to be completed within 45 days. That's pretty tight.

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

#410

Post by colinmhayes »

JasserInicide wrote: post #394
colinmhayes wrote: post #378

Earlier quoted context omitted.

I wouldn't be surprised if Musk tries this. Seems like there's some land in Idaho or around that part that he could move all his companies to and his cult of personality might follow.

That sounds nice, but I have 0 faith in any of the big entrepreneurs out there to successfully run this. It will end up like that one Disney-run town in the 90s: corners cut everywhere, residents with 0 representation, just a mess all around. The fact remains is any company making a town/city will want a tangible return on it, and that fundamentally conflicts with how a municipal government is ran.

I don't think the company would try to create the town, they'd just start building office space and hiring people to move there. Then the town would grow around them.
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