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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)

#511

Post by reillyse »

ChrisLomont wrote: post #475
reillyse wrote: post #426

People in the comments here seem stuck in the weeds around various laws and tax incentives. The overarching issue is that housing (something everyone needs) is being treated as an asset class. As an asset class people who own it want it to increase in price which gives the government an incentive to maintain and increase this value. Unfortunately this makes it more and more expensive for people who need housing. Deco…

>is being treated as an asset class It always has been and likely always will be an assert class - it can be sold later so it's an asset. For well over 100 years the inflation adjusted price of new housing has been a quite similar rate per sq foot, despite the quality and safety having increased many fold over that time.

I think you are misunderstanding me.

I didn’t say it was an asset. The majority of physical things you purchase are assets.

I said it was an “asset class” in the financial use of the term.

“ An asset class is a grouping of investments that exhibit similar characteristics and are subject to the same laws and regulations.”

It is being treated as an asset class as opposed to say a service or a utility.

We need housing and clothing, but we don’t treat or normal clothing as an asset class. We buy it and use it, we don’t expect it to appreciate in value.

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

#512

Post by thehappypm »

It’s frustrating to because housing really is one of those areas that you could just throw money at to solve. The government could build huge towers of apartments, maybe even on federal land, and sell them at cost. But this straight up does not happen.

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

#513

Post by plankers »

probably_wrong wrote: post #32
plankers wrote: post #24

Earlier quoted context omitted.

you didn't even hit the core dependency: a capitalist operating system which inherently directs capital to a small pool of people

As much as I'd like to throw capitalism under the bus, communist Russia was well known for its housing problems too.

excuse me, what? they got their housing under control just as soon as they were able to modernize their agriculture-based economy into a modern industrial workforce in less than 50 years

https://www.statista.com/statistics/1249206/us-ussr-comparis...

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

#514

Post by alistairSH »

valarauko wrote: post #415
alistairSH wrote: post #375

Earlier quoted context omitted.

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…

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?

Yes, universal. Oregon (USA) has used universal vote-by-mail for many years now. It's widely considered one of the best systems in the US. Voter rolls are updated by the DMV (or via state websites), everybody receives a ballot by mail prior to the election. Voters can return the ballot by mail, at a drop-box, or they can choose to vote in-person. Voters don't have to vote any earlier - as long as the ballot is post-marked by election day, it will be counted.

https://en.wikipedia.org/wiki/Elections_in_Oregon https://states.aarp.org/oregon/election-voting-guide

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

#515

Post by dizzant »

notch656a wrote: post #384
dntrkv wrote: post #381

Earlier quoted context omitted.

That is one reason, but there are many. * You get to option the car with exactly the features/colors you want. * People will pay a premium for something brand new. * Financing for used cars usually carries a slightly higher interest rate. * The actual cost at the dealership can vary significantly depending on the make/model/dealership

During beginning of COVID I drove a Tacoma off the lot for ~29k out the door and at the end of COVID I had several offers to buy it from me used with over 10k miles on it for anywhere from $30-31.5k. At that time you could still buy it new for ~29-30k. In fact the only reason why I bought new in the first place was because even a 10 year old tacoma is worth the better part of a new one. Guess it depends on your marke…

I don’t understand the downvotes. Your conclusion is wrong but you make a good contribution. Thanks for the anecdata.

I too have seen this phenomenon, and I think it’s pretty common recently because the used car market is really out of whack. In my case, last year I bought a lightly used Sonata for about $30k with 12k miles, and today I could still trade it for about the same price with 31k miles on it.

Where you’re wrong is that this phenomenon doesn’t apply in general to the used car market but only in the last few years because of the chip shortage shrinking the supply of new cars. Short supply in turn increased demand for used cars, raising the prices.

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

#516

Post by namlem »

wikitopian wrote: post #482
namlem wrote: post #467

Earlier quoted context omitted.

Dense urban neighborhoods are the ones propping up the single family neighborhoods, not the other way around. The infrastructure costs per taxpayer are way higher in low density neighborhoods. All those extra roads, sewage lines, water lines, power lines, street lights, etc. add up. The single family homes are the leeches not paying their fair share.

You'll get to test your hypothesis that middle class families are the real problem with urban life when they quietly ghost on urban zones subjected to these cool ideas of yours. Let's just sit back and see how it plays out.

Lots of middle class families (to say nothing of the extremely wealthy, who also often live in dense city centers) live in apartments and condominiums lol. It's the single family homes that are the problem. They are wildly inefficient in terms of land use.

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

#517

Post by mrep »

namlem wrote: post #453
anovikov wrote: post #246

Earlier quoted context omitted.

OK, so returns from 1870 to 2015 are same for housing and stocks. Which again proves that there's nothing morally wrong about housing prices, if these investments are replaceable, one can always invest in stocks to save up to buy housing (at least on average, that is).

On the contrary, housing shouldn't appreciate. It's bad for the economy as a whole, and especially for young people, for homes to be an appreciating asset. Housing should be a commodity, not an investment.

Housing doesn't have to appreciate to be an investment though because you still have rental income.

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

#518

Post by tpmoney »

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.

Unless your property taxes are over $20K per year, you can? It's just most people don't because their standard deduction is greater than what they have records for itemizing. https://www.thebalance.com/property-tax-deduction-3192847

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

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Post by nemo44x »

namlem wrote: post #458
infogulch wrote: post #357

A couple ideas for how to fix some real estate problems: 1. A zoning rule that requires home owners to live in the owned home. This would prevent remote/foreign money from meddling with local housing in particular areas, and prevents big corps from buying up all the homes and forcing people to lease them out. Some people want to lease though, so that's why I think it's more appropriate as a zoning tool for particular…

None of this would have much impact. What is really needed is to abolish most forms of land use restrictions. Abolish parking minimums, abolish floor-area-ratio minimums, abolish single family zoning, abolish or severely limit community review of new housing developments. Neighborhoods built prior to WWII are nicer places to live precisely because these rules didn't exist when they were built. It was the insanity of…

> Neighborhoods built prior to WWII are nicer places to live

The East Coast is a great place to appreciate this dynamic. There are a lot of old suburbs and towns and they tend to be great places to live. The homes are beautiful and well maintained, the trees are mature, and they are generally expensive places to live.

Contrast them with adjacent towns that were built up post WW2 and the homes are ugly and isolated from restaurants and shops and they probably don't have a train station. And the property values are generally much lower.

Every non-rural home should be walkable to a real park, public transit into the anchoring city, and a town area with shops. So many post-WW2 suburbs are just wastelands where every home is an isolated island. But they aren't rural. It's weird.

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

#520

Post by namlem »

valarauko wrote: post #502
namlem wrote: post #446

Earlier quoted context omitted.

Early voting. Let people cast their vote for the two weeks preceding the election.

How does that work? The polling booths are staffed and open two weeks for walk ins?

Yeah. Though you'd need much less staff since you'd be getting lower volume.
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