Please do, it means my property taxes will go down. I can't wait!
Making housing more affordable means your home's value will have to come down
71–80 of 192 posts
Re: Making housing more affordable means your home's value will have to come down
#72> To raise housing affordability, we have to lower prices, or at least get price increases consistently below the rate of inflation. I'll pick door number two, Monty. Not because that's what I actually want, but because I'm pretty certain that's how it will play out. Lowering nominal asset prices is almost as hard as lowering nominal wages. It only happens when policymakers screw up. That's what inflation is for.
Lowering housing prices will put many mortgages underwater. We are seeing the fallout from this today in CRE and across all properties in 2008.
Today, affordable housing means someone takes a loss. In new housing, the builder or the lender could take the loss but they won't start a project unless they are guaranteed to make a profit, which means the property owner takes the loss.
Deflating prices on existing housing means either the lender (ha!) or the homeowner takes the loss. An additional impact of deflating housing costs is that there may not be any equity for major repairs like roofing or medical expenses.
Re: Making housing more affordable means your home's value will have to come down
#73I think it’s weird we haven’t made any new cities in what, 100 years? We just keep trying to crowd into existing places.
People don't want to be part of founding new places. They don't want to go to small places.
The exception to that is retired people. Everyone else needs to worry about job opportunities and schools for their kids.
Re: Making housing more affordable means your home's value will have to come down
#74It 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.
> Increasing median income and economic growth both increase affordability, even if housing costs track inflation. Given 1% growth a year that would take close to a lifetime to just halve current home prices per income. It isn't a solution for the people living today.
"just halving" is a radical change that will never happen on a short timeline.
With a more realistic number of 2% (for the US), you are talking about a 35% reduction in Price/income in 20 years. I think that is a very optimistic case to shoot for socially and politically.
Re: Making housing more affordable means your home's value will have to come down
#75It’s going to be very difficult to make housing more affordable with high interest rates and high inflation. I highly doubt just increasing supply is going to be enough.
Make a law that only humans can buy residential property, and only one house for one human.
So only a human buys a large apartment complex, with all the associated liabilities and risks?
Does that exclude partnerships or just corps and llcs?
Re: Making housing more affordable means your home's value will have to come down
#76Re: Making housing more affordable means your home's value will have to come down
#77As a homeowner I see little benefit for me for the insane value of my home. Do I want to pay more in property taxes? No. If I sell it’s to just buy a different insanely priced home. I suppose I’m privileged in that I have other retirement plans so my kids will inherit my home - and that’s good I guess if they ever want to afford a home. Homes being an investment is the wrong mindset for a healthy society. Have cheap…
But you are competing with the National Association of Realtors. One of the largest spenders on lobbying in America - https://www.opensecrets.org/industries?cycle=2022
The US is a FIRE economy - https://en.wikipedia.org/wiki/FIRE_economy
Re: Making housing more affordable means your home's value will have to come down
#78Earlier 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)
I think you have a very skewed perspective of assets, let alone physical assets (which housing is).
A store that owns its own real estate isnt generating cashflow with it. This is the equivalent to a Homeowner living in a home.
If you are deadset on using intangible assets, it is the same a company holding a drug patent and producing the drug. Cashflow comes from sales, not the patent.
Re: Making housing more affordable means your home's value will have to come down
#79There's little discussion about immigration. Canada has an even higher rate of immigration than the US and, no surprise, is watching housing prices spiral even higher. If you build X affordable units, but let it 2X or even 1.1X new residents, the prices are going to go up. The YIMBY types tend to be in love with unconstrained immigration. Unfortunately, more people means more competition for housing.
> Unfortunately, more people means more competition for housing.
You're explicitly assuming "1.1X new residents" but the point of YIMBY is to increase supply fast enough to maintain housing affordability. You're making the case for YIMBY rather than disproving it.
Re: Making housing more affordable means your home's value will have to come down
#80Housing 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 t…
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