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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)

#711

Post by cheriot »

dionidium wrote: post #655
cheriot wrote: post #644

Earlier quoted context omitted.

As long as people can't afford to buy they're "less invested" so no reason to address housing affordability... In the modern housing market that's a self fulfilling prophecy. How about that principle of one person, one vote.

> How about that principle of one person, one vote. Reality, in my view, is absolutely chock-full of contradictions. I believe in the principle of one person, one vote; and I believe that what I said above happens also to be true. The dialectic doesn't care that we might wish things were simpler or more straightforward.

In a world with stable rents, renters also become long term residents and invested in the community. If someone’s only “invested” financially I doubt that they have the community’s interests at heart.

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

#712

Post by frumper »

dexterdog wrote: post #521
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.

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.

The landlord still pays property taxes on his investment properties. It’s his income tax that is offset.

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

#713

Post by edmcnulty101 »

QuarterReptile wrote: post #677
edmcnulty101 wrote: post #239

Earlier quoted context omitted.

> Housing affordability plagued Germany of the early 20th century You gotta reach back to over a hundred years ago to find an example? > Can you list these rich countries with 'population explosion[s]'? What the hell are you talking about? The population in the US is the highest it's been in history. You're using a bullshit metric like growth rate which is a percentage of constantly increasing number? 1% of 100 is th…

>Housing has never been this much of a problem up until the past decade or two. >You gotta reach back to over a hundred years ago to find an example? So, by 'never', you meant somewhere around 60 years? 75 years? I ask because you discount my 80 year-old example (chosen by availability because I'm reading an interesting book on the economics of Nazi Germany right now) as if it couldn't possibly be relevant because it…

> And I hope that will continue, though things look bleak in that regard.

I suspect you hope that continues because it benefits you and your agenda. Not because it's what's best for a country.

If you don't understand basic science like carrying capacity of an area and stable population density...and how population's expand and contract to meet that stable density...if left without interference...then yeah, you're not going to understand my point.

I suspect you have an agenda so it's not a productive conversation.

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

#714

Post by namlem »

edmcnulty101 wrote: post #543
namlem wrote: post #473

Earlier quoted context omitted.

Then why did Japan face a massive housing bubble in the 1980s, despite low immigration? And why did their housing problem only go away when they reformed their zoning laws to allow people to build? Population is a negligible factor. Laws restricting land use are artificially constraining the supply of housing, and these laws have grown more common and more popular.

Why not both supply and demand? The reason the laws are needed is because the land is being overrun by people. Lifting the laws ruins someones neighborhood, keeping the laws makes it unaffordable to live there. The solution is just to have less people who want the land.

Immigration is good for the economy.

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

#715

Post by grog454 »

mindslight wrote: post #617
JamesBarney wrote: post #349

Earlier quoted context omitted.

I wish I could write off all my personal expenses as business expenses. But I understand why the laws are written such that I can't

I actually don't understand why the laws are written that way, apart from the political goal of causing W2 workers ("suckers") to bear a disproportionate tax burden. A W2 worker incurs expenses that are necessary to earn their income, including food, transportation, clothing, and healthcare. If they were able to account for these necessary expenses as a business does, the expenses would be directly deducted from inco…

> If they were able to account for these necessary expenses as a business does, the expenses would be directly deducted from income.

I thought that's mostly the point of the standard or itemized deduction (which businesses don't and shouldn't get).

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

#716

Post by jjav »

lkbm wrote: post #191
danielrpa wrote: post #16

Earlier quoted context omitted.

If you are free and able to vote but won't do it, it's hard for me to feel too much pity for your situation. I started voting when I was 16 (my birth country allows that) and voted on every single election until I immigrated to the US - and then voted on every US election since becoming a citizen.

> If you are free and able to vote but won't do it, it's hard for me to feel too much pity for your situation. What if I vote, but people with interests aligned with mine tend not to? What if those people not voting are acting as rationally as the people who vote frequently? Consider these two groups, who get the same number of votes, live under the government for the same amount of time, but rationally have differen…

> so maybe it's okay that Bob ends up more represented

In this example, I'd say it is very legitimate that the Bob has over time more influence how local things are run, since he's a long-time local that has to live with it. All the others are transients that come and go.

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

#717

Post by jjav »

pochekailov wrote: post #48
rco8786 wrote: post #46

Earlier quoted context omitted.

Definitely not that simple. To use your same argument though, it’s not just homeowners - it’s homeowners and aspiring homeowners . Which is nearly everyone.

The longer I live the more I am finding the universe is working on extremely simple few principles; their relations create complexity. Aspiring homeowners will never become homeowners if the price is exclusionary. Take SF: with average salary of 75-79K, the apartment cost starts from 1.1M. Only 8% has salary > than 100K, that makes the remaining 92% the "aspiring" homeowners. They will stay "aspiring" for the rest of…

> Take SF

> They will stay "aspiring" for the rest of their life.

They have a very viable option, which is to leave SF and go somewhere else where they can stop aspiring and afford to actually become homeowners if that's what they want.

I speak from first-hand experience, although in my case it was Manhattan not SF. I very badly wanted to live in Manhattan but no matter how I sliced the numbers, there was no way. Too expensive.

I didn't remain "aspiring" for the rest of my life though. I gave up on that dream and moved and bought a house elsewhere. It's worked just fine.

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

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Post by adgjlsfhk1 »

djbebs wrote: post #622
cheriot wrote: post #600

Earlier quoted context omitted.

> And are losing value on the property, which is the point of depreciation. The house depreciates while the land appreciates. In the US for the last 50 years has been net appreciation for most homes. > If it were so profitable, then tons of capital currently being spent on other uses (tech, medical, finance) would instead go into buying up more housing. Hedge funds have been buying houses at scale since the great rec…

Why do you believe land appreciates?

read some Adam Smith. land appreciates as long as population increases because you can't make more of it.

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

#719

Post by distances »

jjav wrote: post #693
distances wrote: post #567

Earlier quoted context omitted.

And if it's attainable, does it make financial sense? I rent an apartment now, and to buy a similar would be roughly 1000 times the monthly rent. I would have to bet very heavily on appreciation before that made financial sense, even with the leverage of a mortgage.

> to buy a similar would be roughly 1000 times the monthly rent. Have you somehow inherited into a rent-controlled apartment still paying the same $5 rent from 1800?

Talking about the total apartment price, not a monthly installment.

Yes most of the city is rent controlled, this is a ten year old rental contract. Rent is about 600€ and apartment I estimate would be 500-600k. Could also be more though, I'm not exactly up to date.

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

#720

Post by pandaman »

dcolkitt wrote: post #625
ChrisLomont wrote: post #455

Earlier quoted context omitted.

>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…

> FM does not guarantee most mortgages, What? Of course Fannie and Freddie guarantee the MBS they issue. Which is an implicitly a guarantee from the US government. Otherwise they'd trade at much wider credit spreads, which would in turn lead to higher rates for home buyers. You don't have to take my word for it, here's the New York Fed's own words: For agency MBS, the GSEs and Ginnie Mae promise full and timely payme…

>Both still own one home. Both are still consuming housing that's worth $25k/yr to them. Yet the government collects no tax revenue. Exempting the implicit value of rent is a subsidy favoring owner occupied housing.

Why stop at rent? Alice cooks at home? Tax implicit cost of dining out.

Alice goes shopping? Tax implicit delivery cost.

Alice conceives a child? Tax implicit IVF cost.

Alice gives birth? Tax implicit adoption cost.

Alice dies? Tax implicit execution cost.

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