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Priced out of home ownership

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Re: Priced out of home ownership

#771

Post by throwitaway222 »

nayuki wrote: post #757
ToucanLoucan wrote: post #689

Earlier quoted context omitted.

While it is a multitude of factors, a bunch of those factors could be solved in an instant with a simple new regulation: a cap on how many homes a single entity/person can own, with steep taxes applied to every home above that cap. This would flood the market with homes as investors and corporate landlords moved to unload inventory and the prices would fall drastically. One could even have a cap that lowers over a lo…

Nice try. Oh The Urbanity! - "What Happened When This City Banned Housing Investors": https://www.youtube.com/watch?v=BRqZBuu_Ers

It was such a small study that it favorably attracted outsiders that finally got a chance at owning, which gentrified the community. If this was more of a global policy, the study would have reveal massively different results.

Re: Priced out of home ownership

#772

Post by cycomanic »

AnthonyMouse wrote: post #589
dogcomplex wrote: post #502

Earlier quoted context omitted.

Tbf many of those restrictions are there for good city planning reasons - and important to keeping a city livable and not outgrowing its infrastructure. But the cost of enforcing those is quite often a ridiculously bogged-down planning department that often takes months or a year to process applications and revisions, significantly inflating the risk and thus costs of construction, and relegating it to big firms that…

> Tbf many of those restrictions are there for good city planning reasons - and important to keeping a city livable and not outgrowing its infrastructure. I don't believe this to be true. If someone wants to build a single multi-story building in an area, no additional infrastructure should be required. It's one building, the existing infrastructure shouldn't have so little slack in it that this could be a problem. I…

Nobody is talking about building a single multidwelling building. But you can't make rules just for a single building (what are you going to do for the next building... And the next). There are plenty of examples where local governments have removed lots of restrictions and essentially created Airbnb wastelands, a good example is the southbank in Melbourne. The last time I looked into it (admittedly some years ago), they had a single primary school and one post office for ~50000 people IIRC. It was definitely high density housing, but no infrastructure that makes it liveable except for running Airbnb and rich people who want a holiday apartment close to the casino.

Re: Priced out of home ownership

#773

Post by A4ET8a8uTh0 »

nostrademons wrote: post #615
dan-robertson wrote: post #351

Earlier quoted context omitted.

> do Canada, Australia, New Zealand, the US, Britain, Ireland, etc, all have the same inability to build …? Sort of? See eg https://www.ft.com/content/dca3f034-bfe8-4f21-bcdc-2b274053f... for some graphs that show Europe vs anglophone countries in an obvious way. Obviously there are lots of differences between the countries, eg the specifics of their planning systems and economies. The US is different because of the…

> I don’t know why prices are still up though – if interest rates being high was making housing unaffordable, one would expect prices to be down. This is counterintuitive, but also persistent across high-interest rate environments. I asked my mom what the housing market was like in 1980, when rates went up to ~20%, and she said "Prices were basically stable, but nobody was selling houses." Similarly, if you look at h…

But this is where it gets messy. Interest rates as they are now are already considered 'too high' by the WS crowd ( I have my own opinion, but it is just that -- an opinion ) and any indication that FED will lower rates is met with glee. There is, naturally, a solid reason for it. High rates will slow down the reckless flow funds sloshing around the economy ( and would help with the ridiculous prices ). However, this would come at a cost that no one wants to pay. I am not even talking about the political cost. No one wants to think of paying that high a price for serving US debt. I mean, I hold negligible amount of US bonds and I don't want to pay that..

But then US wants to 'invest' in current wars.. sorry, national security ... and money has to come from somewhere.

I feel like I should explictly state this is not an attempt at derailing this thread.. politics and rates are part of the reason we are in this mess. I agree that 20% rate would clean it all up really quick

Re: Priced out of home ownership

#774

Post by ameister14 »

seanmcdirmid wrote: post #500
alexpetralia wrote: post #373

Earlier quoted context omitted.

Asian countries have a lot more people and build a lot more housing.

And yet housing prices in much of Asia is still insane. The only market that is sane is sort of Japan with a falling population and an aversion to property speculation due to getting burned on their last property bubble. Chinese housing market is completely messed up, with turn over almost halted since the government won’t let prices fall no matter what, while they have overbuilt like crazy.

Chinese municipal governments are funded through the tax assessed on the sale of the home and not through a continuous property tax - or at least that used to be the case, haven't checked in a while. That resulted in municipalities encouraging higher prices for housing.

Re: Priced out of home ownership

#775

Post by ToucanLoucan »

nayuki wrote: post #757
ToucanLoucan wrote: post #689

Earlier quoted context omitted.

While it is a multitude of factors, a bunch of those factors could be solved in an instant with a simple new regulation: a cap on how many homes a single entity/person can own, with steep taxes applied to every home above that cap. This would flood the market with homes as investors and corporate landlords moved to unload inventory and the prices would fall drastically. One could even have a cap that lowers over a lo…

Nice try. Oh The Urbanity! - "What Happened When This City Banned Housing Investors": https://www.youtube.com/watch?v=BRqZBuu_Ers

I'm not watching that clickbaity nonsense, but I will happily flip through the studies they cite as their sources, and doing so tells me several things.

For one, the city did not "ban housing investors," they banned some investors from purchasing a subset of homes, which is already weak, and only made weaker by the fact that the first study analyzes only a few months of market activity under that new restriction.

That being said, both studies do indeed conclude that a link cannot be established with certainty between the policy and house price reduction.

> Results from the difference in difference analysis show that the null hypothesis that the policy effect on home prices and days on the market is not significantly different from zero cannot be rejected. This means that it cannot be concluded that the buy-to-let restriction reduced housing prices or increased the days on the market.

However, this is one city, not in America notably where the problem is at it's worst, and they did not restrict lower income housing which is the most liable to be outbid on by private investors and rented, so I would hardly say these two studies by themselves utterly disprove anything in the way your dismissive comment implies they do. I don't think a partial restriction on a housing market in one metropolitan area out of the roughly ten-thousand currently on the planet is definitive proof.

Re: Priced out of home ownership

#776

Post by A4ET8a8uTh0 »

csomar wrote: post #754
tmnvix wrote: post #274

People intuitively jump to the conclusion that the problem is caused by a lack of building. While more building would help, a lack of it isn't the main cause of this problem. Ask yourself, do Canada, Australia, New Zealand, the US, Britain, Ireland, etc, all have the same inability to build or is there maybe some other common cause? In my view this is symptomatic of a more fundamental issue - global asset price infla…

But you have to admit that no one could have guessed that increasing the money supply (ie: printing money) would have led to higher asset (including real estate) pricing.

This, and certainly no one has warned about this type of policy being inflationary by default. Granted, it is just a part of the equation, but not a small one by any means.

Re: Priced out of home ownership

#777

Post by A4ET8a8uTh0 »

ericmay wrote: post #758
AnthonyMouse wrote: post #572

Earlier quoted context omitted.

> Total number of dwellings per thousand inhabitants, 2022 and 2011 The issue here is that demand shifts regionally over time. Dwelling units in Detroit don't satisfy demand in San Francisco. The result is that you continually have to increase supply in the places demand currently is. To keep prices flat, the number of units per thousand inhabitants has to increase over time, because the number of empty units in area…

> Dwelling units in Detroit don't satisfy demand in San Francisco. They do help though. Individuals need to realize they can’t afford to live in a place like California and have to give up that luxury if they want more affordable housing arrangements.

I hear what you are saying, but I have an issue with saying something to the effect of 'you are too poor to live in this state'. I can kinda accept it at the city level, but saying 'just move to another state' is a little much. And I am saying this as a person, who moved few thousand miles, because that was my best opportunity at the time.

Re: Priced out of home ownership

#778

Post by bunderbunder »

tmnvix wrote: post #274

People intuitively jump to the conclusion that the problem is caused by a lack of building. While more building would help, a lack of it isn't the main cause of this problem. Ask yourself, do Canada, Australia, New Zealand, the US, Britain, Ireland, etc, all have the same inability to build or is there maybe some other common cause? In my view this is symptomatic of a more fundamental issue - global asset price infla…

At least in our city, another big thing that seems to be tied to cheap credit is the rise of house flipping. Fueled by cheap interest rates and low capital gains taxes, it's easy for a decently capitalized speculator to buy up older houses, do quick, cursory updates to the interior modeling, and then put them back on the market again at a significant markup.

This is a quadruple whammy for people who just want somewhere to live. It means people who only have budget for an older home need to be hasty with purchases so they can get ahead of the speculators. It directly reduces the supply of homes by extending the period in which they aren't occupied. It reduces the supply of more affordable housing by quickly converting it all into more expensive housing. And it robs people who might want to fix up their own home of the opportunity to choose their own decor.

It's not actually front running, but it still feels like a similar kind of problem.

Re: Priced out of home ownership

#779

Post by Marsymars »

ToucanLoucan wrote: post #708
Marsymars wrote: post #706

Earlier quoted context omitted.

It seems to me that such a cap would help affordability for people who are currently renting homes that they can't afford to buy, but it's not going to make more homes available (and might slow down the rate of building due to the value of a newly built home being lower), so won't help anyone who isn't already in a home, or who already owns their home. (The latter of which it will hurt by decreasing their home value.…

Hard disagree. The market is complex but a massive driver of price hikes is investment companies and private owners coming in to an already hot market and making cash offers that are higher than any aspiring homeowner can match with loans, which are inherently tied to the stated assessment of the property. It's the largest factor in the absolutely ridiculous prices we're currently seeing, and also the most straightfo…

I'm not really clear on what you're disagreeing on. I've acknowledged that prices could go down for people who are already in homes and who don't own them - that's the only portion of the market that your post and proposal addresses.

Re: Priced out of home ownership

#780

Post by jimbokun »

shuckles wrote: post #318
tmnvix wrote: post #274

People intuitively jump to the conclusion that the problem is caused by a lack of building. While more building would help, a lack of it isn't the main cause of this problem. Ask yourself, do Canada, Australia, New Zealand, the US, Britain, Ireland, etc, all have the same inability to build or is there maybe some other common cause? In my view this is symptomatic of a more fundamental issue - global asset price infla…

> People intuitively jump to the conclusion that the problem is caused by a lack of building. In my experience, people "intuitively" jump to basically every conclusion besides this one. "Greedy landlords" or "[favorite scapegoat] collusion" are intuitive conclusions which are far more common than supply and demand. > Ask yourself, do Canada, Australia, New Zealand, the US, Britain, Ireland, etc, all have the same ina…

> "Greedy landlords"

It's always amusing that this implies back when housing was cheap, landlords weren't greedy.

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