461–470 of 550 posts
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When it comes to income and wealth, I don't think so. There aren't enough people in the middle ground between rich and poor for that to be a meaningful stat for most things.
If you look at income distribution over time you'll see that the middle indeed shrunk. However, they moved to high income.
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People who are able to restrict housing development (e.g. existing home owners) have too much political power on a topic that shouldn’t be up for a vote.
Imagine if current hospitals could object to opening new hospitals. Or grocery stores could object to competitors getting permits.
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I'm going to assume ignorance and try to explain why landlords exist. Of course you could already understand this and have this as an ideological stance, in which case my effort is likely wasted. Landlords assume a similar role in economy that banks do, they assume risk on your belalf. We have quantified this to an extent that you can reliably put a dollar amount on how much risk there is. When you are renting and th…
Landlords do not assume risk in their role as landlords . The land is there regardless of whether anyone "takes on the risk." Landlords often take on risk in their role as property managers or developers. They should be rewarded more for that, and not at all for their simple ownership of land, which again: would be there regardless of whether someone else or no one at all owned it.
A real estate bubble bursting or anything that makes your area unappealing to live in would suddenly be really problematic and in the case of leverage get you negative equity.
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I'm going to assume ignorance and try to explain why landlords exist. Of course you could already understand this and have this as an ideological stance, in which case my effort is likely wasted. Landlords assume a similar role in economy that banks do, they assume risk on your belalf. We have quantified this to an extent that you can reliably put a dollar amount on how much risk there is. When you are renting and th…
Landlords assume artificial financial risk entirely created by landlords
Any high risk high reward strategy gets you in charge of creating the risk to chase a higher reward.
The math is fairly similar between spending 10$ to buy a call option and a 1 million down payment to buy a 10 million property with 15 apartments to rent out.
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Are you perhaps too privileged to have seen situations where owning land is a liability? As we speak, close to a billion people are in the middle of ongoing wars. There are entire countries where land is worthless. Ukraine has several hundred square kilometers of land with a thick covering of fiber optic cables from drones.
A better first world example is laws change and now this site where you were gonna build self storage for 20yr before selling out to an apartment/office developer is now worthless
If you think insurance will save you, it might not if no one is willing to insure your property (large true in California nowadays) or the insurance company goes bankrupt in a crisis (happens pretty much all the time).
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Landlords do not assume risk in their role as landlords . The land is there regardless of whether anyone "takes on the risk." Landlords often take on risk in their role as property managers or developers. They should be rewarded more for that, and not at all for their simple ownership of land, which again: would be there regardless of whether someone else or no one at all owned it.
The risk inherent in the ownership of land is having too much of your wealth concentrated in it, and having used leverage to purchase the land. Both are true for a large fraction of landlords in the world. A real estate bubble bursting or anything that makes your area unappealing to live in would suddenly be really problematic and in the case of leverage get you negative equity.
If they didn't "take on that risk," the land is still right there being land.
That is not true for banks or insurers, where if no one was willing to hold that risk then the inverse product wouldn't exist.
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The risk inherent in the ownership of land is having too much of your wealth concentrated in it, and having used leverage to purchase the land. Both are true for a large fraction of landlords in the world. A real estate bubble bursting or anything that makes your area unappealing to live in would suddenly be really problematic and in the case of leverage get you negative equity.
Just because you can lose money does not mean you are "taking on risk" in the way a bank or insurer does. If they didn't "take on that risk," the land is still right there being land. That is not true for banks or insurers, where if no one was willing to hold that risk then the inverse product wouldn't exist.
I'm sure you have a philosophical point here, but this is exactly how the modern economy prices risk. Your understanding of the semantics of risk is not being questioned here.
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I’ve been thinking about this quite a bit lately. I live in an apartment in Stockholm but I also own an old forest cabin. It’s perfectly legal for me to live in said cabin permanently, but it would be strictly illegal for me to build a new house to the same simple standard. The building codes are basically making it illegal to be poor. Similar patterns exist for student housing. The old style of student corridors wit…
A lot of the stricter codes have very real safety benefits though - modern electrical is much safer, fire sprinklers add significant cost but really do help contain fires, etc. (Not that it's all good, e.g. I don't like Washington's WAC 51-11R which just seems way overcomplicated.)
And it comes at a cost of slowly destroying our society and turning everyone into landless peasants. Is that worth it?
Nevermind that a lot the IBC is ghost written by industry to the benefit of industry. A lot of local addendums are the same but for local interests. A lot of the permitting process is hack garbage to obfuscate how bad it all really is.
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I’m always a bit confused how this is so difficult for people to understand. If I want to move into your neighborhood, there are two options - I move into new construction or I move into your house. There is no option C where I decide that because the housing stock is garbage, I decide to go somewhere else.
Here's an academic paper on how many people don't understand housing economics, even though they understand the same concepts in other areas: https://www.aeaweb.org/articles?id=10.1257/jep.20241428 I can't tell you how many times I've been told that "supply and demand doesn't apply to housing," both by super wealthy NIMBY homeowners and by those struggling to get by.
When I dug even deeper, I discovered that, pretty consistently, they don't understand the concepts anywhere, but their misconceptions sometimes incidentally fit reality, leaving it to appear as though they have an understanding sometimes. Housing is one of those places where those misconceptions don't usually fit and that is where the breakdown really becomes apparent, hence why they see housing as something unique.