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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)

#491

Post by goodpoint »

horsawlarway wrote: post #431
goodpoint wrote: post #428

Earlier quoted context omitted.

Please refresh your memory around the topic https://en.wikipedia.org/wiki/Human#History > and housing was absolutely an investment before that ..and don't make absurd generalizations. Humanity is way older that the middle ages, and hundreds of different cultures existed around the world even during the middle ages. Very few had the concept of investment and the idea a house has a monetary value that grows significant…

Ok - well have a good one. You aren't helping yourself here, and I don't think we'll have a productive conversation.

Same here.

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

#492

Post by namlem »

carabiner wrote: post #324
obblekk wrote: post #179

Have we considered just building new cities? It would be cool if the state could run a contest, have a rural county sign up to reform their zoning laws, and in exchange receive 100 year tax relief guarantees from the state to build a new city. America used to build new cities from scratch all the time up until WW2. This creates competition between cities (new entrants) resulting in better policies all around. And the…

Of course, and they failed. See the huge empty tracts in places like California City and Merced.

Not all of them failed. Las Vegas succeeded for example.

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

#493

Post by foota »

abeppu wrote: post #420
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…

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…

What you describe does happen, unless they use that transfer process described, but by doing so they reduce the effective cost basis of the new property by the difference between the cost basis of the old one and the sale price.

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

#494

Post by Tiktaalik »

andrewmutz wrote: post #461
Tiktaalik wrote: post #423

Earlier quoted context omitted.

> home is incentivized to ensure their investment is maximized and that results in a lot of NIMBYism I'm not sure a lot of NIMBYism comes from the notion of protecting home values. If a home were to be upzoned for apartments the underlying land value would rise significantly, and this would be a significant financial windfall for the home owner. They should want to see their land be upzoned for apts but that's not wh…

Everyone benefits from their own property being upzoned, but loses when their neighbors build upzoned properties. Hence the NIMBYs block other people's development

This would only be in the case where their neighbour receives beneficial upzoning and they don't. This would be an unlikely edge case.

Generally when we see upzoning advocacy it's neighbourhood wide if not city wide.

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

#495

Post by rpmw »

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.

If you take the standard deduction isn't that exactly what you are doing?

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

#496

Post by namlem »

obblekk wrote: post #179

Have we considered just building new cities? It would be cool if the state could run a contest, have a rural county sign up to reform their zoning laws, and in exchange receive 100 year tax relief guarantees from the state to build a new city. America used to build new cities from scratch all the time up until WW2. This creates competition between cities (new entrants) resulting in better policies all around. And the…

How would people get to work? If you have a new city, there are going to very few employers due to a lack of workers, and therefore few residents, due to a lack of employers. People who WFH can live anywhere, why would they move to an empty city?

If we want new cities to be built, what is needed is high capacity rapid transit. For example, build a high speed rail line from Chicago to St. Louis, and watch as the small towns in between become cities.

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

#497

Post by [deleted] »

horsawlarway wrote: post #219
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.

I genuinely don't understand why you're getting down-voted. Not only has it been true historically - there's a real reason to allow it: it incentivizes owners to maintain and improve their properties. Further... maintenance of that property requires investment , both in time and labor. If you make it so that owners have no reward or incentive for improving their properties, they WON'T DO IT. Why invest money into fix…

[deleted]

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

#498

Post by wizofaus »

ouEight12 wrote: post #299
huevosabio wrote: post #281

Earlier quoted context omitted.

You fix it by deprecating only the improved value. The land beneath a building does not deprecate, whereas the value of the building should. Since for most properties the majority of the value is in the land itself, your basis to deprecate would be much lower, and more realistic.

> Since for most properties the majority of the value is in the land itself I'm not sure that's the case for the majority of the country. At-least it's not here in my greater metro area (suburbs or rural... yuppie downtown areas... perhaps, but again, downtown is not majority for most places)

I'd think anywhere where apartments are viable to build it would be true, and of course large rural properties. Whether they make up "most properties" I'm not sure - it would surprise me if much less than half of properties in Australia were sitting on land worth more than the house itself (despite the enormous amount of undeveloped/low-value land we have!).

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

#499

Post by lozenge »

throwaway908724 wrote: post #214
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…

Wow, I wish. I'm speaking as someone who put all his retirement savings into index funds year after year, but then married someone whose job is related to real estate. Real estate feels more concrete and understandable to her than finance, so that's where our money goes now. It's not easy free money, and I don't know why you would think that any high-profile, low-barrier-to-entry investment would be easy free money.…

"It's not free money because it's more time consuming than the stock market!"

It's free money in the sense that you are getting paid for having had the money to buy the property. Your wife might be putting in the time, but she is not more expert than 90% of people who could live there and maintain the property just as well (assuming they didn't have to pay you rent and the police didn't come to enforce your "property rights").

And yes, that means the stock market is also free money.

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

#500

Post by pooper »

kaibee wrote: post #285
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…

> I'm not sure how you'd "fix" that without penalizing non-rental companies for expanding. A land value tax would be a pretty straight forward solution to most of the issues around this.

I think the only long term solution is a federal land and building tax. This is too important to leave to states (and definitely local) governments. A high tax with no credits, deductions, exemptions.

Then, from this tax, we can pay "forward" every adult tax payer (not children, only adults) a fixed amount that pays the cost of an imaginary nationwide median cost of a two bedroom unit. Only adults, all adults, regardless of whether you have no child or eight children. Must file a federal income tax return to qualify. Median nationwide cost somehow calculated and weighted by population, hopefully updated more than once a decade.

Everybody from Amazon.com to Walmart pays this land + building tax regardless of whether they are in Manhattan, New York or Deport, Texas. No exceptions.

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