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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)

#661

Post by kelnos »

tpmoney wrote: post #518
happiness_idx wrote: post #293

Earlier quoted context omitted.

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

The link you provide points out the SALT deduction cap of $10k. With the standard deduction up to $12k+ now, if your only itemized deduction is your property and state income taxes, itemizing isn't going to be worth it.

We were so close to losing the cap on SALT deductions with the Inflation Reduction Act; I'm super bummed it didn't make it into the final bill.

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

#662

Post by kelnos »

djbebs wrote: post #620
kaibee wrote: post #285

Earlier quoted context omitted.

> 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.

Define land value.

This isn't hard: whatever a local assessor determines it to be, something they already have a lot of experience doing.

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

#663

Post by scythe »

namelessoracle wrote: post #640
scythe wrote: post #345

Earlier quoted context omitted.

>I understand a key part of communism is you and your family own nothing No it isn't. https://www.workers.org/private-property/ > Private property, to a communist, is not your shoes or toothbrush, or even your house. > Those things are called personal property and under socialism and under communism they continue to belong to workers in much the same manner as they do now. Criticize people for what they actually beli…

So why does China refuse to sell land to its citizens and only leases?

I can't defend any particular policy of any particular place. I don't think I would call myself a communist, either. But restricting land ownership is a common feature of technocracy in dense urban environments. I seem to recall that the UK does something similar. Even in the US, when you "own" a condo, you are subject to various liens and easements, and can under certain circumstances be forced to sell. China, being rather crowded, likely has created policies to manage land availability.

Communism is, primarily and essentially, about the end of money. Other features of socialist countries are largely the result of how some theorists planned to achieve communism, although they invariably fail. (Some people insist on adding "so far".) Some communists on Quora directly addressed the question of homeownership here:

https://www.quora.com/What-is-the-general-view-on-owning-pri...

Somehow, all kinds of unrelated policies get called "communism" or "Marxism", even when they directly contradict what Marx said (e.g. restrictions on gun ownership). I don't think it's helpful to policy debates to have this syncretistic demon hanging around appropriating the bad name of communism.

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

#664

Post by ChrisLomont »

kareemsabri wrote: post #647
ChrisLomont wrote: post #546

Earlier quoted context omitted.

>Both Fannie and Freddie buy mortgages Yes, I said as much. The OP claimed they guaranteed mortgages, which they do not. I'm decently aware of the MBS market - I developed MBS pricing algorithms in the late 90s/early 00s for putting houses in tranches after a friend at a mortgage company asked for help with algorithms. Turns out the problem was NP-hard (a lattice based linear programming problem if I recall), but goo…

I don't think this is true. > At Fannie Mae, we provide liquidity to the single-family market by purchasing and guaranteeing mortgage loans made by lenders and issuing debt securities and mortgage-backed securities that attract global investors to finance U.S. housing. https://www.fanniemae.com/about-us/what-we-do#:~:text=At%20F... .

>I don't think this is true.

They do guarantee some loans, as I wrote above. The marketing blurb you copies cleverly does not state they will guarantee any mortgage loan.

If they did, the housing crisis would not have been such a crisis - the crisis happened when so many investors realized the loans they bought could crash and cause them massive losses - precisely because FM does NOT guarantee all loans.

They guarantee certain loans (conforming loans), and charge a fee to investors for this when they purchase MBS from Fannie Mae. Conforming loans make up under 40% of all mortgage loans. Of all conforming loans made, Freddie and Fannie end up purchasing about 60% of those.

It may be that they stopped buying loans they deem too risky, but that didn't use to be the case.

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

#665

Post by dionidium »

TaylorAlexander wrote: post #575
cgdub wrote: post #535

Earlier quoted context omitted.

There is public housing in NYC, and I can assure you that your landlord is better than NYCHA.

The article I shared in my first comment in this chain addresses problems in NYC and compares that to Vienna and Singapore, which are much better. So please take a look if you would like to learn about alternatives. https://charterforcompassion.org/shareable-community-ideas/p...

I actually know already about Vienna and Singapore. I have zero confidence we can copy that model here. Every time we've tried to do public housing it's been a disaster. At some point it's just who we are. If I keep striking out, it's no use to tell me to look to Mike Trout for an example of what's possible. I'm not Mike Trout. I will never be Mike Trout. I will never achieve what Mike Trout has achieved. If we're talking about my batting average, then Mike Trout's success is irrelevant. I need an approach at the plate that accounts for my skills and limitations.

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

#666

Post by kelnos »

mdavis6890 wrote: post #580
Enginerrrd wrote: post #486

Earlier quoted context omitted.

>Really the only problem here is the step-up cost-basis at death that you mention. This is indeed a big problem Why is that a problem?

It provides a large artificial financial incentive to hold onto a property that you otherwise would sell. I also think it's not right to create this kind of arbitrary, large tax break that only applies in specific circumstances. I think if we're going to have a capital-gains tax (and maybe we shouldn't), then we should keep it simple and not have carve-outs. If I sell my house while I'm on my death bed, I pay all the…

> It provides a large artificial financial incentive to hold onto a property that you otherwise would sell.

Maybe I'm cold-hearted, but "make it someone else's problem after I die" seems like a pretty decent incentive not to sell.

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

#667

Post by fleddr »

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…

This positive effect goes far beyond just maintaining the house and land.

Governments love home owners. They are typically stable citizens in the work-force, law-abiding, reliable, etc. They have a high time preference and have every interest in maintaining the status quo, safety, anything that makes society pleasant.

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

#668

Post by kelnos »

namelessoracle wrote: post #640
scythe wrote: post #345

Earlier quoted context omitted.

>I understand a key part of communism is you and your family own nothing No it isn't. https://www.workers.org/private-property/ > Private property, to a communist, is not your shoes or toothbrush, or even your house. > Those things are called personal property and under socialism and under communism they continue to belong to workers in much the same manner as they do now. Criticize people for what they actually beli…

So why does China refuse to sell land to its citizens and only leases?

Assuming that's true (I have no knowledge of how Chinese real estate works), then that's because China is an authoritarian country that has decided it wants to control every aspect of citizens' lives. That can be a feature of any economic system, if the government is powerful enough, and has nothing to do with communism.

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

#669

Post by nemo44x »

rory wrote: post #635
nemo44x wrote: post #542

I'm not sure people understand how expensive it is to build what we consider a house in the West. Materials are unbelievably expensive and if you go cheap you're going to be replacing a lot of them soon. Labor is through the roof expensive. People forget that the average home was ~700 square feet 100 years ago. It's 2400 today. How many people would be willing to put a family of 4 or 5 in a 700 square foot home today…

> People forget that the average home was ~700 square feet 100 years ago. Interesting related graph: https://infogram.com/1pqdpn20vkmlelcq6qx7jzwz9pf00g9xnq5 Although we're currently in a frothy situation, scaled out a bit, it's not clear that housing prices are growing more than general inflation when adjusting for square footage. What _has_ happened is A) houses have gotten bigger and B) people per household has go…

I’d love to go back 100+ years on that. Houses were made with better quality materials in many cases, but were much smaller and without things like fancy kitchens and bathrooms.

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

#670

Post by pdonis »

carom wrote: post #402
TaylorAlexander wrote: post #364

Earlier quoted context omitted.

> Many people seem to want to live in large, densely populated areas, and for most people that is always going to mean renting. The "for most people that is always going to mean renting" is that part that we could change through large scale collective policy. That's what Singapore has done for example. No one doubts whether people want to live in cities. We are asking whether the model of private landlords is the bes…

We do not need to hand over ownership to the government to build more houses. Just simplify zoning laws. Private landlords want to build. People want to maximize the value of their properties. They can't because of zoning laws that favor single family home hellscapes.

> single family home hellscapes

"Hellscapes" is uncalled for. Many people like living in single family homes. The goal of housing should not be to enforce a single cookie cutter configuration on everybody. It should be to enable a free market in housing so that all of the different preferences people have for housing can have a reasonable chance of being met. I agree zoning laws should not favor single family homes to the detriment of other types, but equally they should not disfavor single family homes.

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