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Making housing more affordable means your home's value will have to come down

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Re: Making housing more affordable means your home's value will have to come down

#61

Post by s1artibartfast »

grecy wrote: post #18

This is so fundamental to the issue. It is impossible for housing to be simultaneously a good investment and affordable. Policymakers simply have to decide if they cater to those that already own homes, or those desperately wanting to buy one. I feel strongly housing is a basic human right, and so we should stop viewing residential property as an appreciating asset.

Housing fundamentally IS and should be a good investment for the homeowner. It retains it's functionality over time, and saves the owner considerable rental expenses.

Think about what conditions would need to be true for housing to be a bad investment.

>I feel strongly housing is a basic human right, and so we should stop viewing residential property as an appreciating asset.

Its not about "views", it is about reality. You cant simply wish an alternative into existence by closing your eyes.

Re: Making housing more affordable means your home's value will have to come down

#62

Post by Eddy_Viscosity2 »

bee_rider wrote: post #59

I can’t really imagine wanting to own a house nowadays, given how unstable everything is. I’d rather buy an RV or something like that. Using home equity as a long term store of value seems nuts, what if your town turns into the next Florida (uninsurable hurricane and flood zone).

You have to live somewhere and renting has many downsides as well. Some view a house an investment, but its also a commodity that you use everyday.

Re: Making housing more affordable means your home's value will have to come down

#64

Post by jackcosgrove »

bilsbie wrote: post #32

I think it’s weird we haven’t made any new cities in what, 100 years? We just keep trying to crowd into existing places.

South Korea built a new capital but most everyone there still tries to live in Seoul. There are very affordable cities in upstate New York within a few hours of New York City that are still losing population. This concentration in winner cities might swamp efforts to lower prices with new cities.

Arguably the Sunbelt suburban cities are new cities. If 90% of a metro's population is new since 1945, that's a new city grafted onto an old town.

In the US at least, we have built new cities, and we have also crowded into a smaller number of winner cities.

Canada, despite being huge, actually has fewer opportunities for new cities because building on the Canadian shield is impractical.

Re: Making housing more affordable means your home's value will have to come down

#65

Post by s1artibartfast »

mrcode007 wrote: post #54
throwaway1105q wrote: post #25

Earlier quoted context omitted.

Housing can be an asset and a basic right. The rights based housing just isn't in the center of a capital city. Also, do you mean housing ownership, or just housing? People can be housed in houses they don't own too - and it's probably better if it's owned by the municipality.

An asset produces cash flow. Primary residence can only be a speculation device because for a majority of people it does not produce a cash flow. Instead it produces expenses.

nonsense. A primary residence obviously provides utility in the form of shelter for the owner.

No assets directly produce cashflow, whether they are factories, tractors, or tools.

Re: Making housing more affordable means your home's value will have to come down

#66

Post by MattGaiser »

bee_rider wrote: post #59

I can’t really imagine wanting to own a house nowadays, given how unstable everything is. I’d rather buy an RV or something like that. Using home equity as a long term store of value seems nuts, what if your town turns into the next Florida (uninsurable hurricane and flood zone).

> what if your town turns into the next Florida (uninsurable hurricane and flood zone).

These are pretty well-known risks. The people buying just think someone else will bail them out (and aren't generally wrong).

Re: Making housing more affordable means your home's value will have to come down

#67

Post by everforward »

Samwitch wrote: post #38

Housing affordability is such a silly subject. We live in both a democracy and a capitalist economy, both in the US and Canada. Most believe those within some locality should have a say over that area. If they do not want more housing because it financially benefits them to enforce scarcity, why should they not be able to? We accept the limited availability of other luxury items, why is housing in a _specific_ locali…

Housing affordability is wrapped up in good jobs aggregating around major cities.

The complaint is that good jobs are accruing to particular areas, through nothing the inhabitants of those areas have done, and then the locals are using that accrual of jobs to boost their own property prices.

Housing in a specific locality is a weird luxury item because people often don’t really want the housing, they want access to the job market.

So an underlying question is “are we okay with citizens enriching themselves by gatekeeping the good jobs behind a paywall?”

Their desire to enforce scarcity is causing societal issues as workers demand more wages to pay for the housing, prices of everything go up as a result of wage demands (among other things), and the US deals with its citizens funneling ever greater portions of their income to housing.

Re: Making housing more affordable means your home's value will have to come down

#68

Post by s1artibartfast »

hammock wrote: post #33
s1artibartfast wrote: post #27

It seems like the author is willfully miss-understanding Trudeau's statement. Value and affordability can be considered independently. Increasing median income and economic growth both increase affordability, even if housing costs track inflation.

Can you explain how?

I thought I did, but can give an example.

If the median income increases from 50K to 100K (adjusting for inflation), and houses stay at 500k (adjusting for inflation), they have become more affordable without losing value.

Re: Making housing more affordable means your home's value will have to come down

#69

Post by mrcode007 »

s1artibartfast wrote: post #65
mrcode007 wrote: post #54

Earlier quoted context omitted.

An asset produces cash flow. Primary residence can only be a speculation device because for a majority of people it does not produce a cash flow. Instead it produces expenses.

nonsense. A primary residence obviously provides utility in the form of shelter for the owner. No assets directly produce cashflow, whether they are factories, tractors, or tools.

Utility is not an asset. When you grow up with your parents they provide shelter, you get a utility of it. No asset for you. Majority of assets produce cash flow (e.g. licensing software - IP asset, renting real estate to someone - you get monthly rent, bond - coupon payments, stock - you get dividends, etc)

Re: Making housing more affordable means your home's value will have to come down

#70

Post by throwaway1105q »

mrcode007 wrote: post #69
s1artibartfast wrote: post #65

Earlier quoted context omitted.

nonsense. A primary residence obviously provides utility in the form of shelter for the owner. No assets directly produce cashflow, whether they are factories, tractors, or tools.

Utility is not an asset. When you grow up with your parents they provide shelter, you get a utility of it. No asset for you. Majority of assets produce cash flow (e.g. licensing software - IP asset, renting real estate to someone - you get monthly rent, bond - coupon payments, stock - you get dividends, etc)

Assets don't have to produce any cash flow. Most popularly, gold. Stocks that provide stable dividends are also less and less usual.

Assets can just hold their real value compared to inflation and that's useful enough - even losing value slower than inflation is still good.

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