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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)

#521

Post by dexterdog »

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.

When you are the owner/user and not the landlord you should be paying the taxes because most of the taxes are for use in the local community and most of that is schooling. The landlord gets no benefit from the majority of that stuff. The tenant does.

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

#522

Post by plankers »

pochekailov wrote: post #23
plankers wrote: post #19

Earlier quoted context omitted.

Seems humanity is headed towards Asimov's Caves of Steel anyway due to climate collapse, so you'll get your wish.

Have more futuristic optimism. We are doing quite well on the climate. We will prevent it once we get fully to solar and then build CO2 scrubbers using solar energy. Energy percentage that come from renewables is more than 10x higher than anticipated 10 years ago. And don't call it a "collapse": a change is not necessary to the worse, sometimes it is to the better.

i don't know what to call uncontrollable positive feedback loops in the global temperature if not a "collapse"

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

#523

Post by nemo44x »

namlem wrote: post #462
throwaway22032 wrote: post #27

Our economic system is set up such that you either hit a bar at which you accumulate capital forever unless you make a mistake, or you're loss-making forever. Once you hit that bar, your job becomes buying up housing like it's a Monopoly board. As an individual you can either choose to win or lose this game. We're not going to change it, at least not within our lifetimes.

Japan changed it. They passed sweeping zoning reform that made it easy to build and prices went down. New Zealand just passed sweeping reform to address their housing crisis as well. Reforms are being passed in the US too. Oregon, California, Minneapolis, Ann Arbor, and others have started to pass reforms.

> Japan changed it. They passed sweeping zoning reform that made it easy to build and prices went down

Japanese homes are generally prefabricated and have a lifespan of 20-30 years before they are disposed of and a new prefabricated home is put in its place. This is why housing is "cheap" in Japan.

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

#524

Post by Emma_Goldman »

ChrisLomont wrote: post #489
Emma_Goldman wrote: post #460

Earlier quoted context omitted.

>"Did they become silly rich? Or did they quit because it is a major problem to actually make it very profitable versus other uses of capital and time? I'm a decently saavy investor (in many things), and have watched multiple friends start up rental properties, only to stop once it became clear that tenants destroy things, costs to maintain properties are volatile and astronomical, the work required is significant, a…

And there was a housing crash in there and decent growth in population over that time. Next, instead of picking a window wrapping the biggest housing bust in a century, pick various decades and see how normal volatility behaves - and you might find this variability not uncommon. In fact, from your own source, Figure 1 - the percent of rented properties is, well, nearly constant over the entire window (31% rented in 2…

>"And there was a housing crash in there and decent growth in population over that time."

There was a slight slump in rentals after the financial crisis, not before. So if anything it would depress the subsequent growth. In England the population grew over that period from about 51 million to 55 million. That's a 7% increase. Privately rented households, as per the link I posted above, rose by 63%. Hardly compelling.

>"In fact, from your own source, Figure 1 - the percent of rented properties is, well, nearly constant over the entire window (31% rented in 2007, 37% rented in 2017). And somewhere in there mortgage laws got significantly tighter - no need for pesky investors to be the cause of less mortgages."

Figure 1 shows private rentals increase from 13% in 2007 to 20% in 2017. Social rentals, which you are bizarrely conflating with private rentals, refers to social housing, and is exactly what I think should take the place of landlords. So its decline reinforces my point.

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

#525

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.

Btw here's a video with data to back up what I said: https://www.youtube.com/watch?v=7Nw6qyyrTeI

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

#526

Post by ambernightcrush »

ChrisLomont wrote: post #455
dcolkitt wrote: post #262

Earlier quoted context omitted.

> this cannot be solved from the federal level. I disagree. The federal government invests enormous resources into subsidizing home ownership. Everything from Fannie Mae guaranteeing mortgages to not taxing home owners on the imputed value of rent. And I think that's all well and good, home ownership has many positive externalities. But there's zero point subsidizing demand for something when supply in inelastic. In…

>Fannie Mae guaranteeing mortgages FM does not guarantee most mortgages, only certain govt types like FHA and VA loans, which the govt decided to back in order to help low income people get loans (otherwise the rates would be even higher for them). FM buys up a lot of mortgages and sells them to investors, then turns around and puts the money back into productive use. >taxing home owners on the imputed value of rent…

Both Fannie and Freddie buy mortgages, but your description is much more stringent than in truth. Fannie buys from big banks, Freddie buys from thrift banks; both buy conforming loans(conforming to their standards) which is a large part of the home buying audience. In addition to that, the non-conforming loans that you listed e.g. FHA and VA. Those government-backed loans are for special populations. These mortgages are assembled into MBS and then sold to investors; the banks that originated the loans get their liquidity back.

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

#527

Post by alistairSH »

dghughes wrote: post #263
doliveira wrote: post #95

Earlier quoted context omitted.

Election day not being a holiday in the USA is weird

It isn't in Canada either mostly I'd say because there's no set date. The government can lose a confidence vote and an election can be called at anytime (a date set in the future not immediate). But we do get a paid hour or two off work to go vote that's law.

The US has a mix of dates. All elections are effectively at the state or local level. Primaries are all over the calendar. General elections for President are all on the same Tuesday in November.

So, a national holiday really only makes sense for those presidential election years. Or, we could declare "first Tuesday after first Monday in Nov" as an annual holiday, and many states would likely line up their fall elections on that date. Primaries would still be a mess, but they always will, as they're not always open elections anyways (some states require party membership or declared party affiliation to vote in primaries).

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

#528

Post by nemo44x »

strikelaserclaw wrote: post #33
throwaway22032 wrote: post #27

Our economic system is set up such that you either hit a bar at which you accumulate capital forever unless you make a mistake, or you're loss-making forever. Once you hit that bar, your job becomes buying up housing like it's a Monopoly board. As an individual you can either choose to win or lose this game. We're not going to change it, at least not within our lifetimes.

the fatal flaw in capitalism imo, a lot of wealth gets created which is good for everyone but eventually, a lot of that wealth also gets held by a smaller and smaller minority while the rest try to desperately compete over whatever is left over. After a certain point a certain portion of any new wealth created somehow trickles up to the capital owning class (think your VC's, fund owners, other rich investors), this c…

I'm just not sure that's true. The largest growing class of people over the last 50 years is the upper middle class going from a vert small percentage of the population 50 years ago (doctors, lawyers, and high level execs) to being a much larger percentage of the country, around 30% today. There are more "rich" people today than ever as the upper middle class is open to more professions like engineers, upper-middle managers, etc.

The issue is relative to a lot of people. There was a much large "middle class" 50 years ago and most people were much closer to each other. That middle class has shrunk because a lot of it graduated into a new upper middle class. The upper middle class has no problems buying up property in the most sought after areas as they are close to the places these people work. 50 years ago, it was a larger group of similar middle-income people competing for these places. Today, they can't compete and are pushed out to less desirable places or they rent and complain they'll never be able to buy a home. When really it's that they won't be able to buy a home in the place they dream to live because there's more people that can outbid them than there are properties.

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

#529

Post by dexterdog »

namdnay wrote: post #267
namelessoracle wrote: post #216

Earlier quoted context omitted.

So a family on hard times should be forced to leave their grandmothers home when she dies and hope they can find a new one? Gentrification can easily push a property in the place they've lived their whole lives out of their price range. And the family home might not have been super well kept up so the "windfall" isn't as big as the property values in the area may reflect. This happens now with gentrification in big c…

In what universe does paying tax on what you inherit equate to communism?

In the universe where the tax was already paid on what was inherited, AKA this one.

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

#530

Post by naasking »

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…

Perhaps you'd like to address rory's reply here which explains how the original post would actually work:

https://news.ycombinator.com/item?id=32500536

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