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)

#411

Post by ThrustVectoring » Wed, Aug 17, 2022, 6:50 PM UTC

coxmichael wrote: post #251

ThrustVectoring wrote: post #237

Housing crises are a symptom , not a cause. The root issue is demographics, specifically the worker-to-retiree ratio growing at a rate that outpaces productivity growth. Since saving is essentially impossible at societal scales and generational timeframes (how exactly is a car built in 1980 supposed to cause more nurses to provide healthcare in 2020?), tomorrow's workers have to be coerced into transferring real good…

I feel like this kind of zero-sum argument does the rounds quite frequently. The reality is that housing is the main mechanism used by the older wealthy folk for their pensions, and subsequently transfers wealth up through the generations. What we need is a way for all that unproductive capital used to directly fund the businesses of the young, growing the real economy (rather than the financial). Alongside that, add…

> What we need is a way for all that unproductive capital used to directly fund the businesses of the young, growing the real economy (rather than the financial).

You're conflating financial "capital" with real productive capital here. In real terms, non-productive financial assets simply do not matter; whether landlords extract a billion or a trillion dollars makes not a whit of difference in the real goods and services the economy produces.

If you redirect financial assets from bidding up the value of housing to bidding up the value of small businesses, you've simply moved the siphon from cost of rent to the cost of owning your own business and/or suppressing wages.

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

#412

Post by dgs_sgd » Wed, Aug 17, 2022, 6:51 PM UTC

kindatrue wrote: post #151

I just think about this letter to the Atherton (median sold home price: $7.6M) Mayor and City Council: === Subject line: IMMENSELY AGAINST multifamily development! I am writing this letter to communicate our IMMENSE objection to the creation of multifamily overlay zones in Atherton … Please IMMEDIATELY REMOVE all multifamily overlay zoning projects from the Housing Element which will be submitted to the state in July…

Really astounding that a supposed philanthropist can write a letter like this and at the same time allegedly dedicate her life to improving people's welfare (the definition of philanthropy). I get that objecting to the housing development doesn't necessarily imply she's not an effective philanthropist, but the strong wording and outright dismissal really makes me think that her motives for doing philanthropy are more about power and a feeling of importance than an actual concern for others.

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

#413

Post by carom » Wed, Aug 17, 2022, 6:53 PM UTC

pessimizer wrote: post #249

axg11 wrote: post #141

Earlier quoted context omitted.

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.

> When was housing not an investment? Housing was never an investment before recent decades, with an emphasis on the housing bubble. Housing tracked inflation for 400 years . https://thegoldobserver.substack.com/p/amsterdam-real-housin... edit: the history of US house prices is that they strictly tracked inflation, then with government subsidy right after WWII, housing prices jumped up, then stayed flat at that new l…

The US was a brand new country that was mostly empty. Look at England for some historical data.

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

#414

Post by [deleted] » Wed, Aug 17, 2022, 6:53 PM UTC

sbf501 wrote: post #377

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…

We need a third party to validate both of your claims, because I don't know where to start to understand who is right. This is an example of someone (me) who wants to understand the issue, but would need to google for days to understand both arguments.

[deleted]

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

#415

Post by valarauko » Wed, Aug 17, 2022, 6:54 PM UTC

alistairSH wrote: post #375

valarauko wrote: post #320

Earlier quoted context omitted.

Realistically, how would that work for these same group of people? They'd have to know well in advance that they would need postal ballots and complete and return them in advance of election day. Would shift workers working multiple jobs be best served by mail-in voting? tbf I'm not sure if there is a better way, but it seems relying on mail-in ballots helps some people and alienates a different group of people.

I was imagining the ballots would be auto-shipped based on voter rolls (which get updated with DMV records in many states - this should also be mandatory). So, check mail box as normal. Receive ballot. Research candidates (or not) and fill out. Drop in the mailbox. Not much different than paying paper bills. Who were you imagining would be alienated by mail-in voting? We could do mandatory extended timeframe/hours in…

Are you suggesting mail-in ballots as a universal option that covers everybody? That seems unfeasible logistically. Does any large country offer universal mail-in ballots?

I think mail-in ballots best serve voters in an environment where they are the norm, rather than the exception. For example, the campaign cycles, like debates, that target the large segment of undecided voters right before election day. The mail-in voter has to be more informed about candidates and policy than an average voter to come to an equivalent informed decision about their vote weeks before the average voter. Yes, if the goal is to simply increase voter turnout, universal mail-in ballots are probably great. I wonder if that best serves the voter, though - hence my question.

My familiarity is with the Indian electoral system, which is highly regarded (at least within the country). Mail-in ballots are an option for a subset of people, but they make up for it by making polling booths readily accessible - your booth is just a short walk away. Election days are holidays, but I'm sure it still impacts workers in similar ways. Still, voter turnout is usually not too bad. Expanding mail-in voting has been discussed as an option for the very large floating population of migrant workers, but we don't have a solution yet. The logistics of offering universal mail-in ballots for a country approaching 1.4 billion is daunting. Already, the General Elections need to be spaced out over several weeks to allow electoral officials and poll workers to cover the entire country.

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

#416

Post by toss1 » Wed, Aug 17, 2022, 6:55 PM UTC

sbf501 wrote: post #377

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…

We need a third party to validate both of your claims, because I don't know where to start to understand who is right. This is an example of someone (me) who wants to understand the issue, but would need to google for days to understand both arguments.

The rebuttal by mminer237 is much closer to right [0].

Also it isn't even as good as mminer237 mentions, as many states also have a much lower exemption, and there is work in congress to get rid of the step-up in basis (a bad thing, imo) and to reduce the $12MM lifetime gift & estate exemption (a very good thing).

So yes, there are some advantages, but OP is vastly exaggerating as if it is some freebie to landlords when it is not. There were some freebies introduced in the bills in the Trump term for the type of LLCs that Trump runs, but IDK if they were fixed in legislation in this term.

If you want a general complaint, perhaps the angle is that capital is taxed much less than labor, under some notion that lower taxation is necessary to get people with capitol to actually deploy it in investments. I think that is provably false, and certainly does not require the level of tax code favoritism it currently enjoys.

[0] source: tax & estate attny at biglaw firm in the household, although this is just from info absorbed by osmosis over years and is NOT a detailed legal analysis.

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

#417

Post by stainforth » Wed, Aug 17, 2022, 7:00 PM UTC

foobarian wrote: post #254

NoSorryCannot wrote: post #240

Earlier quoted context omitted.

Oooor they can sell it, as originally stated. Goodness. The point is reduce land entitlement a little bit. Yes, there's going to be some light incentive to cut loose and that's OK.

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.

I think you can argue migration (forced) through history is tied to this. The US was a recent star in growth due to free land. But there is no more free land. And Mars does not fill that role. We need to disempower rentiers.

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

#418

Post by sbf501 » Wed, Aug 17, 2022, 7:01 PM UTC

toss1 wrote: post #416

sbf501 wrote: post #377

Earlier quoted context omitted.

We need a third party to validate both of your claims, because I don't know where to start to understand who is right. This is an example of someone (me) who wants to understand the issue, but would need to google for days to understand both arguments.

The rebuttal by mminer237 is much closer to right [0]. Also it isn't even as good as mminer237 mentions, as many states also have a much lower exemption, and there is work in congress to get rid of the step-up in basis (a bad thing, imo) and to reduce the $12MM lifetime gift & estate exemption (a very good thing). So yes, there are some advantages, but OP is vastly exaggerating as if it is some freebie to landlords w…

Thank you.

> If you want a general complaint, perhaps the angle is that capital is taxed much less than labor, under some notion that lower taxation is necessary to get people with capitol to actually deploy it in investments.

Yes, I recall when cap gains taxes dropped significantly during GWB and was, sadly, happy. Of course, I was just a dumb 20-something and didn't realize how much of boon to the wealthy it was.

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

#419

Post by nly » Wed, Aug 17, 2022, 7:01 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…

Selling the family home when you inherit in the UK is the norm.

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

#420

Post by abeppu » Wed, Aug 17, 2022, 7:01 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…

This is certainly not my area so I could be missing something basic. But after you sell a property, why shouldn't that force a reevaluation on past depreciation writeoffs? In idkyall's post, they mention the scenario of depreciating your property down to an effective value of $0 and then selling to buy another property to start again. You've argued that this only covers a fraction of your income. But at a basic level, if you get enough from the sale to buy a new property, then the old one must have been worth much more than $0 so one was wrong for decades about claimed depreciation ... right? In which case, it seems like it should be natural and fair to have to pay up on taxes from those previous years.

If I can invest in real estate, rent it out for decades, and then sell it at a significant profit (which seems to be the case in many in-demand cities), then why should _any_ amount of that rental income get a to be balanced against imaginary depreciation?