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If you sell a house these days, the buyer might be a pension fund

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Re: If you sell a house these days, the buyer might be a pension fund

#721

Post by zamfi »

davidw wrote: post #125

Here's why investors buy up houses: they know your neighbors will do the dirty work of artificially constraining the housing supply, which makes it a good investment. Here's one who comes right out and explains this: > Meanwhile, local opposition to building is so commonplace and the approval process so cumbersome, time consuming, and expensive, even when a proposed project complies entirely with requirements, approv…

> they know your neighbors will do the dirty work of artificially constraining the housing supply, which makes it a good investment

...until your neighbors are all renters, at which point the tide turns?

Re: If you sell a house these days, the buyer might be a pension fund

#722

Post by jiofih »

temp8964 wrote: post #596
jiofih wrote: post #482

Earlier quoted context omitted.

I had to laugh at “the most dense development”. 400sqm is absolute luxury in Europe, and plenty of space for a massive detached house with a garden and garage. A house on the high end here sits on less than 150m2 (northern europe).

Yes. But birthrate is only half in the Europe compared to the U.S.

And what does that have to do with anything? The USA would need 3 billion citizens to rival the density of the Netherlands.

Or are you implying you need a 500sqm house to raise two kids?

Re: If you sell a house these days, the buyer might be a pension fund

#723

Post by ako »

delaynomore wrote: post #676
Justsignedup wrote: post #461

Earlier quoted context omitted.

The irony is that density means more people, more homes, more availability. That means more jobs open up and makes the place more lively. More desireable. That means the house property value will go up. They are thinking "will this make the property value go down in the next 5 years"? vs "will this make the property value skyrocket in the next 10 years". We are catering to short-term gains at the expense of long-term…

Look at any typical city in North America, your priciest neighborhood likely has low density. People tend to work away from where they live (at least for high paying jobs) and prefer having ample space at home therefore I don't think higher density would increase property value as you stated.

You're looking at one half of a normal distribution and seeing "more is less" (more money is less houses per square meter), and you're reacting to someone looking at the other half of the normal distribution and he's seeing "more is more". You're both right, just not looking at the entire picture.

Re: If you sell a house these days, the buyer might be a pension fund

#724

Post by rich_sasha »

onlyrealcuzzo wrote: post #626
rich_sasha wrote: post #97

Earlier quoted context omitted.

This can be fixed somewhat by excluding primary residence from such taxes (essentially a tax-free allowance of 1). This cuts at hoarding real estate as investment, is a nice extra tax on people buying second homes, and doesn't (directly) affect 99% of homeowners who only ever own one house. I'm not sure I support land taxes etc. but this at least deals with your objection.

So the people who live in an area shouldn't be the ones paying the taxes to support the area? Someone else should pay the taxes for them? Either your tax would come entirely from income - huge handout to homeowners / cost to non-homeonwers - regressive. OR your sales tax would be so crushing that no one would ever buy anything in your community. Or you could live in a fantasy land.

If it’s sarcasm I detect in your otherwise fine post, it doesn’t add to the content.

There are many ways to fund the local area. UK has explicit “council tax”, based on property value, but not as a fixed percentage, rather more linked to the percentage of the house value - so your tax bill doesn’t double just because other peoples houses appreciated. These are paid for all houses, and go to the local government. I think this is indeed one of the main sources of income for local councils.

But for example for capital gains tax, which goes fully to the central government, primary residence is excluded.

This means that people buying property as investments end up paying CGT but not ordinary house owners. If investment properties are rented out, it is the renters that pay council tax, as the actual inhabitants of the properties.

There are so many ways to skin a rabbit with taxes, you could tailor it pretty well to discriminate between homeowners and investors.

Re: If you sell a house these days, the buyer might be a pension fund

#725

Post by michaelmrose »

maxsilver wrote: post #593
michaelmrose wrote: post #556

Earlier quoted context omitted.

If you can only build dense housing in the places where there are no few jobs and few people it doesn't help much. The fact that the locals are by definition negatively impacted by new development is a great reason to take virtually all say away from the locals. Anyone who is already a home owner will find that increasing supply of homes a necessary function of the society decreases the value of the asset in which th…

> It's like they are throwing hundreds of thousands of dollars in bags full of hundred dollar bills over your fence and you are complaining about income tax. They aren't throwing dollars over the fence, they're throwing debt over the fence. Sure, my property is on-paper worth more. If I cash that out, I just have to spend it all (every other house got more expensive by an equal amount, and I have to live somewhere).…

The utility of your argument relies on it being something burdensome like a 200% increase but in fact if your property went up by 200% for building a complex it would in fact be extraordinary not only for the nation but for your area as well. If your 200k house for example went up to 600k you could in fact sell it and have a money fight with hundreds of thousands of dollars of real profit in your new living room even after you paid off the capital gains especially when the first 250k single or 500k married couple is tax free.

When you reduced the projected change in price to a more reasonable increase like 10% your argument about not being able to move to a lower col area becomes true because everything has gone up equally but it is hard to argue that the increase has greatly burdened your life to the point that people ought not be allowed to build on property they own.

For example locally if assessed value went from 200k to 220k my taxes would increase 16 per month. 400-450k would net me a cool $41 per month.

Looking at actually realistic figures makes it much harder to justify constraining housing supply which negatively effects all of society in order to optimize your tax bill.

Re: If you sell a house these days, the buyer might be a pension fund

#726

Post by ljm »

kevin_thibedeau wrote: post #549
ljm wrote: post #512

Earlier quoted context omitted.

It also means you can get walkability and nice things like shops and leisure activities without having to buy a car and drive literally everywhere.

That needs a commitment to commercial space on the first floor and underground parking for tenants so that surface parking is available to customers without the need for massive lots. Builders who want to extract maximum profit with the cheapest construction won't go for it.

So, the status quo has to change. Not an easy job, but the rest of the world shows how it can be done.

Re: If you sell a house these days, the buyer might be a pension fund

#727

Post by rootusrootus »

commandlinefan wrote: post #4

This hurts people who already own houses, too - property taxes are assessed on the appraised value of the home, which is a function of what the similarly-sized houses in your area sold for most recently. My property taxes have increased 10% every year for the past several years (and it would have been more if not for a legislative 10% annual cap). I worry that there will come a day when I've paid off my mortgage but…

Even with the artificial constraints in many places, in the end property tax should generally be relatively independent of property value in absolute terms. E.g. in Oregon we have a 3% cap on assessed value, and that probably helped some people for a couple years early on after the law was passed, but over the longer term it doesn't really matter. The only effect assessed value has is on the size of your particular slice of the total tax revenue.

Re: If you sell a house these days, the buyer might be a pension fund

#728

Post by adrianmonk »

OldGoodNewBad wrote: post #466
davidw wrote: post #125

Here's why investors buy up houses: they know your neighbors will do the dirty work of artificially constraining the housing supply, which makes it a good investment. Here's one who comes right out and explains this: > Meanwhile, local opposition to building is so commonplace and the approval process so cumbersome, time consuming, and expensive, even when a proposed project complies entirely with requirements, approv…

Why artificially? People move into single family dwelling neighborhoods because they have lower crime and better schools. There’s nothing artificial about selecting the best environment for yourself and your family. Is it necessary to artificially editorialize when you’re making what is, at its root, a thinly veiled socio-political point?

> Why artificially?

Artificial in the sense of "caused or produced by a human and especially social or political agency" (see https://www.merriam-webster.com/dictionary/artificial).

When prices of something get higher, people naturally try to make more of it to increase supply and cash in on that demand. If a law or zoning regulation or whatever prevents that from happening, that's artificial.

It's not really a statement about whether those laws or regulations are better overall. It's a comparison to other types of investment alternatives which follow the normal laws of supply and demand and have the (lower) earnings to go along with it.

Re: If you sell a house these days, the buyer might be a pension fund

#729

Post by svachalek »

delaynomore wrote: post #676
Justsignedup wrote: post #461

Earlier quoted context omitted.

The irony is that density means more people, more homes, more availability. That means more jobs open up and makes the place more lively. More desireable. That means the house property value will go up. They are thinking "will this make the property value go down in the next 5 years"? vs "will this make the property value skyrocket in the next 10 years". We are catering to short-term gains at the expense of long-term…

Look at any typical city in North America, your priciest neighborhood likely has low density. People tend to work away from where they live (at least for high paying jobs) and prefer having ample space at home therefore I don't think higher density would increase property value as you stated.

You are probably looking at price per home, not price per acre.

Re: If you sell a house these days, the buyer might be a pension fund

#730

Post by ivalm »

dcolkitt wrote: post #609
iso1210 wrote: post #375

Earlier quoted context omitted.

49 parking spaces for 49 houses seems like a disaster in anywhere other than the densest of US cities. Surely most houses have at least 2 drivers? 5 Acres is 2 Hectares, so that's about 25 houses per hectare. Typical new housing estates in the UK is about 25 hours per hectare, with minimum of 3 parking spaces (including a garage if given) for a 4 bed, and 2 for a 3 bed. Even that number of spaces is too low - especia…

So, what? What business is it of the local government? Why can't we just let consenting adults make their own personal decisions about the details of the housing and parking they choose to live in? Some people may only need limited parking. Some people may not need any parking. Maybe they're making a mistake and will regret it. Maybe not. Maybe nobody wants that, in which case the developer will pay the cost. Who car…

Because there are external costs. The “consenting adults” narrative is false. Not enough parking means people living there will use street parking in nearby areas affecting the residents of those communities. This happens all the time.
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