If you sell a house these days, the buyer might be a pension fund • Hacker News Board

Re: If you sell a house these days, the buyer might be a pension fund

#441

Post by dntrkv » Wed, Jun 09, 2021, 5:23 PM UTC

jsmcgd wrote: post #62

adflux wrote: post #26

I really wish we'd get some innovation in the housing market. 3D printing of houses or something could be epic. "Just" disrupt the current construction companies... It's clear they can't keep up with the demand right now.

Lack of housing is not a technology or industrial problem. New homes can be made easily and relatively cheaply if given the go ahead. Lack of housing is by policy. By ensuring there are not enough houses ensures there is more demand than supply, which means higher housing prices, which means higher mortgages. The mortgage market is based on rising house prices. The banking industry is based on the mortgage industry.…

Except construction costs are insane nowadays, and there is a massive shortage of trade workers. Your theory could hold true if we just considered existing homes, but the costs to build a new home have went through the roof in the last decade.

Re: If you sell a house these days, the buyer might be a pension fund

#442

Post by jedberg » Wed, Jun 09, 2021, 5:23 PM UTC

plank_time wrote: post #209

seanp2k2 wrote: post #170

Earlier quoted context omitted.

I’ve ranted about this before but CA Prop 13 not only makes housing a good investment, but one that you’re extremely incentivized to hold onto forever and never move. Two people can be living in houses next to each other valued around 1.5m, and one of them will be paying 1/10th the tax. If anyone wants to buy a house, they have to first be able to afford the property, so the barriers to entry are so much higher for t…

You’re saying that old people should be driven out of their houses because younger, richer people deserve to live in their houses. I’m sure your feelings will change as you get older.

This was a red herring when prop 13 was passed, and is a red herring now. 49 other states don't have prop 13, and yet seniors aren't priced out of their homes.

There are plenty of other solutions. Some states allow you to just pay the same amount each year and put the difference as a lien on the house until you sell. Some states have something like prop 13, but it is applied to entire counties. ie. They allow the entire county to raise their income from property tax by 1% annually. So everyone's home gets reassessed for its value and then the tax rate is set so that the whole county goes up 1%. This means that in some cases people's property taxes actually go down if one area had a massive increase in value.

Every other state figured out a way to avoid this problem. California just loves its "rent control for the wealthy" which is what Prop 13 is.

Prop 13 is the single worst law in California and must go.

And I say this as someone who owns multiple properties in CA, and in fact for one of them, the profit comes entirely from the fact that the tax rate was set in the 70s. If I had to pay property tax on the current value, I'd just sell it because there would be no profit to be had. And in my primary home, my neighbors subsidize me by paying twice what I do even though their homes are worth less. And I subsidize my neighbor who has been here since the 60s and pays 1/10 of what I do for the same services.

And if you're still really concerned about old people losing their homes, at least support getting rid of Prop 13 for all non-primary homes. There is absolutely no reason a rental property should be protected from property tax increases.

Re: If you sell a house these days, the buyer might be a pension fund

#443

Post by woodruffw » Wed, Jun 09, 2021, 5:25 PM UTC

admissionsguy wrote: post #342

woodruffw wrote: post #187

Earlier quoted context omitted.

COVID denialism, election denialism, and “The Great Reset” are high profile crank subjects. Being a conservative Christian doesn’t make you a crank; those things do.

From a purely logical viewpoint, it is a bit hilarious that you consider the objectively most outlandish of these beliefs to be the only non-cranky one. Although it is, admittedly, the most viable one socially.

I don't think truth/outlandishness is all that closely related to whether a particular belief is a crank-y one. For example: horoscopes are fake, but I don't think that people who believe in horoscopes are cranks, per se. Or unfalsifiable claims: plenty of people have crank and non-crank views about things that just don't adhere to proof/disproof.

To put it another way: a lot of religious (particularly Christian) views amount to metaphysical claims that we can't really falsify. That's maybe sufficient to make them "irrational" in a narrow analytical sense, but insufficient to label them as crank-ish.

Re: If you sell a house these days, the buyer might be a pension fund

#444

Post by bcrosby95 » Wed, Jun 09, 2021, 5:25 PM UTC

dragonwriter wrote: post #105

dv_dt wrote: post #33

Earlier quoted context omitted.

This is why CA has prop 13 which limits increases to property taxes from year to year specifically because CA had seem property boom/bust cycles kicking people out of homes because of irrational real estate prices.

Well, no, California has Prop 13, because wealthy investors in property used constructed images of that scenario to build support for a law to transfer more wealth to the already wealthy, not because its was a real problem (and, even if it was, Prop 13 doesn’t focus on dealing with that problem.)

> not because its was a real problem (and, even if it was, Prop 13 doesn’t focus on dealing with that problem.)

California politicians were working on solutions to the property tax problem for years. The same year prop 13 was on ballot, something else was on ballot to fix the problem, which would have done a much better, targeted job - but unfortunately big money poured into prop 13 and that got passed.

My parents bought a new house in 73, and by the time prop 13 passed it was worth around 3x the purchase price. They both worked in tech and were close to having to sell their house (they had 4 kids).

It was a real problem, prop 13 was just a bad solution.

Re: If you sell a house these days, the buyer might be a pension fund

#445

Post by toast0 » Wed, Jun 09, 2021, 5:25 PM UTC

davidw wrote: post #379

iso1210 wrote: post #375

Earlier quoted context omitted.

49 parking spaces for 49 houses seems like a disaster in anywhere other than the densest of US cities. Surely most houses have at least 2 drivers? 5 Acres is 2 Hectares, so that's about 25 houses per hectare. Typical new housing estates in the UK is about 25 hours per hectare, with minimum of 3 parking spaces (including a garage if given) for a 4 bed, and 2 for a 3 bed. Even that number of spaces is too low - especia…

The real disaster (environmental and economic) is that so many places regulate parking so strictly rather than being more market-oriented and allowing people to figure out how much they want. https://www.planetizen.com/features/113459-perils-central-pl...

The issue is that in areas with sufficient parking, on-street parking has few restrictions; maybe you have to move your car every few days and might have a scheduled street cleaning that you need to move for, but you don't need to obtain a permit or feed a meter or worry about where guests might park.

If you put a building with insufficient parking near there, users of that building are likely to park on the nearby streets and that reduces the utility of the street parking for the existing residents; either they may no longer be able to find parking readily, or they need to manage permits, etc.

It's different if you build in an area that already has tightly restricted parking. If you move into a downtown LA building without enough parking for your vehicles, you're not going to be able to find a free spot nearby and you won't reduce the utility of your neighbors.

Re: If you sell a house these days, the buyer might be a pension fund

#446

Post by dnautics » Wed, Jun 09, 2021, 5:26 PM UTC

mattmcknight wrote: post #321

plank_time wrote: post #271

Earlier quoted context omitted.

How are old people with no income supposed to afford capital gains taxes? And if house prices go down do they get a refund?

Mark to market property taxes do go lower when assessments go lower.

You don't get a refund for the intervening years of mania. Oh we're sorry we almost kicked you out of your house because everyone else was paying out the nose for houses because they speculated Amazon would build it's hq there that year so sorry about that. Here's your 50k in taxes back with interest.

Re: If you sell a house these days, the buyer might be a pension fund

#447

Post by dv_dt » Wed, Jun 09, 2021, 5:26 PM UTC

rcpt wrote: post #387

dv_dt wrote: post #372

Earlier quoted context omitted.

There are problems with prop 13, but it does prevent people from being kicked out of their owned homes for temporary market conditions that are out of their control. Imho the problem was that the politics of the day got it passed to cover commercial properties too, when it really should just cover primary residences. And not secondary homes or rental properties.

The California Tax Postponment Program prevents displacement of low income seniors and the disabled. Prop 13 is wholly unnecessary.

These programs often have terrible red tape and even awareness problems. They also ignore people who aren’t seniors but may be going through temporary rough spots. I prefer to have the prop 13 rules fundamentally built in an applied to all primary residences as a measure to provide a more universal stability of a home.

Re: If you sell a house these days, the buyer might be a pension fund

#448

Post by BeFlatXIII » Wed, Jun 09, 2021, 5:26 PM UTC

KingMachiavelli wrote: post #225

etempleton wrote: post #200

In my neighborhood the bank owns a house and has owned it since it was foreclosed upon about three years ago. The house is completely falling apart. It is unlivable. The house is tarpped. Apparently also filled with mold. The yard has rotting wood and weeds that are taller than my head. And no one will do anything about it. The city will fine the bank $100 for each infraction and that is it. The bank could care less.…

Very strange. Typically banks try to sell foreclosures ASAP to the extent that most go the 'short sale' route where they just force a sale. Given it has been only 3 years and it's already inhabitable; something probably went very wrong preventing it from being sold. It's possible the previous tenants just destroyed it... it's really surprising how bad some people treat their home.

How often do people trash a previously un-trashed residence on the way out when being evicted or foreclosed? I suspect it’s much more common behavior than anyone wants to admit.

Re: If you sell a house these days, the buyer might be a pension fund

#449

Post by reallydontask » Wed, Jun 09, 2021, 5:27 PM UTC

iso1210 wrote: post #375

brightball wrote: post #218

Earlier quoted context omitted.

I just experienced something similar to this and it makes me wonder if much of this is just perception. We recently dealt with an out of state builder pushing to have a property that was zoned Neighborhood Commercial to be rezoned to something more flexible so that he could build 49 town homes with 49 parking spots on 5 acres of land. Everybody opposed the rezoning and fought to defeat it. The project would have been…

49 parking spaces for 49 houses seems like a disaster in anywhere other than the densest of US cities. Surely most houses have at least 2 drivers? 5 Acres is 2 Hectares, so that's about 25 houses per hectare. Typical new housing estates in the UK is about 25 hours per hectare, with minimum of 3 parking spaces (including a garage if given) for a 4 bed, and 2 for a 3 bed. Even that number of spaces is too low - especia…

>Minimum of 3 parking spaces for a 4 bed in the UK?

This is certainly not my experience, unless you are counting on street parking and even then, that's a stretch

I'm only thinking of new developments

Re: If you sell a house these days, the buyer might be a pension fund

#450

Post by chipotle_coyote » Wed, Jun 09, 2021, 5:28 PM UTC

plank_time wrote: post #258

throw737858 wrote: post #237

Earlier quoted context omitted.

Someone who owns a house in cali is a milionaire. I am not sure it applies to immigrant who just moved to California.

The old person would have sold the house a long time ago because of the rise of their property tax. They wouldn’t be millionaires. They would have to sell their home for a small gain and then rent for the rest of their lives. And since they are old they have no income so they need to keep moving to cheaper and cheaper apartments. Sounds like a great way to live a life, just because younger people feel like they deser…

> Sounds like a great way to live a life, just because younger people feel like they deserve to live in their house.

At one point, I'm fairly sure all those old people you're talking about were young people who felt like they deserved to live in their house. The difference is that, well, they were able to. I don't think you're intentionally saying "You came of age after 1980, kiddo, so suck it," but that's nonetheless the outcome. Proposition 13 certainly isn't the only reason that housing prices in California have skyrocketed, and housing prices have always been more expensive here than the US median -- but the gap between the California median and the US median started increasing immediately after Proposition 13 was passed and just kept accelerating.