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

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

#791

Post by dclowd9901 »

ip26 wrote: post #71
throwaway22032 wrote: post #27

Our economic system is set up such that you either hit a bar at which you accumulate capital forever unless you make a mistake, or you're loss-making forever. Once you hit that bar, your job becomes buying up housing like it's a Monopoly board. As an individual you can either choose to win or lose this game. We're not going to change it, at least not within our lifetimes.

Agreed; I figure the necessary missing piece is government dampening this effect. Some way or another, to balance it out you need to “leak” capital faster & faster as you accumulate it. The size of the leak would be tuned to allow you to continue to grow your wealth if you are still rapidly creating new wealth, but if you just sit on a kings ransom in safe investments, it would leak away & attenuate. Trouble being, t…

IMO, owning a second property should be just as expensive in taxes as it needs to be to not be profitable to own one as an investment property, in the short and long term. That way people can _have_ second properties, but it's going to cost them, and they can choose to accept the cost or not. A yearly 5% tax on the property value should just about do it.

We need to start treating housing as a vital resource, not an investment, and rationing it.

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

#792

Post by coryrc »

lesuorac wrote: post #772
coryrc wrote: post #538

Earlier quoted context omitted.

You're cherry-picking the most interesting election of the last five years. The recent primary was ~38% turnout. https://www.seattletimes.com/seattle-news/politics/which-wa-...

Ok, so WA had 38% turnout for a primary so what? The whole point is that you need to compare it to other states to make any sense of the data. Arkansas had 38% is looking pretty good. [1]: https://results.enr.clarityelections.com/AR/112731/web.28556...

> The whole point is that you need to compare it to other states to make any sense of the data

I disagree with your assertion. Even so, alistairSH's conclusion: "We'd do well as a country to allow nationwide mail-in voting." like it was solution to solving lack of voting from renters, when cherry-picking data gets us 12 points at best. It might be part of a solution, but it's demonstrably not a majority difference.

All this presumes every possible vote is equally valid.

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

#793

Post by BirdieNZ »

kamaal wrote: post #747
BirdieNZ wrote: post #724

Earlier quoted context omitted.

> The landlord magically pulls a home out of thin air and some group of people maintain for them for free? The building-lord should receive some return for their investment, as they have created value and added to it through maintenance. The land-lord receives return for doing no work, no addition of value, and only through extracting the excess economic rent from their tenants. Unfortunately, conversations around pr…

Yeah, land, like college seats, and gym memberships come in limited quantities. There is no infinite supply of land, college seats, or gym memberships. So whoever acquires a hold on a resource of this nature stands to benefit a better return on investment. Also note the limited nature of time in these things, you are basically in a race condition. Note these extend to things like 401k, or a retirement savings scheme…

The difference between land (and natural resources) and gym memberships, 401ks etc. is that you can make more gyms and companies and investment fhnds, but the supply of locations and natural resources is limited. This means that land functions as a monopoly (hence the board game!) whereas 401ks and gyms are non-monopolistic.

Owners of monopolies stand to benefit from not just a reasonable return on investment, but an excessive return on investment proportion to their contribution to society.

Many countries and societies have handled this in different ways, such as the idea of the commons, or Norway's taxation of oil extraction, or land value taxes and land leases.

> You feel like you are salty that you couldn't get a hold on such a resource in time.

I am a software developer, and as such am able to comfortably acquire land in a good location and provide for my family. However, many of my generation are unable to, unlike previous generations, because the good locations have all been taken by the previous generations. This is why we see enormous poverty next to enormous progress, because late comers to the party are so far behind as to be basically unable to "get on the ladder". The ladder is being pulled up before their eyes.

A great solution to this is to tax the excess economic rents that monopolies create, rather than taxing labour and capital. Henry George is the most famous proponent of such a system, and you can find out more here: https://www.gameofrent.com/ or at astralcodexten's book review of Progress and Poverty.

This means that those who contribute to society through labour and capital are not discouraged from doing so, but those who leech off others through monopoly rent extraction return that rent to the society that created it in the first place. This is a far more just and equitable solution.

Of course, many existing monopoly owners (e.g. landowners, and particularly property investors) hate the idea, because people tend to act in their own self-interest to the disadvantage of others.

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

#794

Post by loldk »

toss1 wrote: post #756
vintermann wrote: post #736

Earlier quoted context omitted.

> Businesses are generally taxed on their PROFITS, which are [INCOME] MINUS [COSTS]. Sure. But why does it get such a sweet deal? It's because we want to encourage business, since businesses produce things of value. But how much does a landlord actually produce things of value, and how much is he just extracting value others are producing (a.k.a "rent")? That's an important thing to consider when we look at having th…

YES! The distinction between extractive vs value-creating profits is very important. That said, it's not automatically a "sweet deal", and identifying that difference is nontrivial. The same activity could be one or the other, depending on how it is done. Your example with a landlord is particularly thorny: >>But how much does a landlord actually produce things of value, ...? A good landlord creates a building from n…

No post body was provided.

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

#795

Post by loldk »

brnaftr361 wrote: post #726
toss1 wrote: post #710

Earlier quoted context omitted.

Of course there are more deductions when an object is a BUSINESS instead of a piece of PERSONAL PROPERTY. No, it does not seem the slightest bit lopsided. There is zero difference between the deductability of expenses you mentioned and expenses for any other business. Businesses are generally taxed on their PROFITS , which are [INCOME] MINUS [COSTS]. The regular homeowner is not running a business. The same thing is…

Rent extraction from the underpriveleged for basic needs in a deliberately skewed market is hardly "business", it's raw exploitation at the systemic and the social level. Justify your habit of cannibalism however you may.

No post body was provided.

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

#796

Post by presentation »

naasking wrote: post #748
presentation wrote: post #744

Earlier quoted context omitted.

There is, that is “the market is willing to buy mixed sized living spaces.” I live in Tokyo, my first apartment was shocked pikachu 230sqft! Oh, the horror! And yet there are plenty of single family homes and 2500+ sqft apartments if you want that. Just in the USA, if you want to live small - the government forcibly tells you that you’re not welcome here.

The market is willing theoretically, but practically with high property values there's more incentive to build tons of smaller units since they'll sell for more in aggregate. This happened in my city, where there's a distinct lack of family-sized apartments in the downtown core. Only older buildings from the 80s prior to recent real estate booms built decent sized units suitable for families.

Well I guess that's the problem with having failed to produce housing supply for decades, until the balance of the market got so far out of whack that pressure for smaller units is that high. Tokyo built both housing and infrastructure to increase the viable land to live in striking distance to the commercial core, and so that's not an issue (although typical apartment sizes for family homes included are much smaller across the board because of the premium on space).

To me, it's a scenario of pick your poison - continue to be unaffordable because society is not willing to accept the consequences of its failures, or eat the consequences for a brighter future. In cities like SF, I don't see a world where it will ever get affordable if they insist that everyone needs to live in 1000+ sqft apartments, unless you plan to pack it to the gills with ultra-tall skyscrapers (never happening) or it becomes so undesirable to live there that people just stop moving there (unlikely, but given the rampant human rights violations it commits everyday to its denizens... well maybe that's the most likely scenario).

Aside, Americans don't know what small apartments even mean. The presence of super tiny Tokyo apartments is a great thing IMO, it means that people can still live centrally even if they aren't rich. I think a lot of people would happily accept a well-designed 200 sqft apartment over a 2-hour commute, if society gave them that option, since Tokyo residents do that en masse everyday.

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

#797

Post by robertlagrant »

sbf501 wrote: post #659
robertlagrant wrote: post #558

Earlier quoted context omitted.

It's a boon to anyone whose job was created by it as well, and whose life was made cheaper by capital investments in automation and/or scale.

Please point to the "boon". If you mean people got to keep their jobs = boon, then I guess you are right. The problem is, wealth was transferred upstream, en masse, and not taxed anywhere near labor. Here is some data that solidly debunks your disguised claim of "trickle down": https://www.epi.org/publication/ceo-pay-has-grown-90-times-f... http://www.ibew.org/media-center/Articles/19Daily/1908/19082...

> Please point to the "boon".

Sure. I said:

> It's a boon to anyone whose job was created by it as well

You then say:

> If you mean people got to keep their jobs = boon

No, I said the job in the first place is funded by investment. I couldn't have made it clearer.

If investors don't invest in your startup/scaleup then there is no job in the first place. Nothing about being grateful for keeping your job.

> The problem is, wealth was transferred upstream, en masse, and not taxed anywhere near labor.

You're thinking in terms of groups instead of individuals, and that the groups are static. You shouldn't (as it will lead to so many broken ways of thinking) and they aren't.

> Here is some data that solidly debunks your disguised claim of "trickle down"

It's not trickle down - I only go for nonpolitical theories, and the US left wing's labels to oversimplify and demonise some fairly standard economics doesn't hold up by that measure.

I'd rather you replied to what I said than straw man it. You will mislead casual readers by doing so.

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

#798

Post by tutorialmanager »

thomastjeffery wrote: post #763
pdonis wrote: post #223

Earlier quoted context omitted.

> You only need one house to live in. Many people do not want to own a home, they would rather rent. Someone has to be the landlord for all those people, and to all those someones, the home is an investment. You can only get rid of homes as investments if you get rid of renting.

And why do people prefer renting to ownership? Because it's cheaper? Because the home buying process is too difficult? Owning a home, even if its value is deprecating, is fundamentally still more attractive than renting. You get to recoup at least some of your investment, and you don't have property management invading your personal life. Most people simply can't afford to buy homes in the first place.

I think many people enjoy the short term benefits of renting (spend money instead of saving for down payment) and undervalue the long term benefits of owning (lower housing cost when retired).

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

#799

Post by thomastjeffery »

tutorialmanager wrote: post #798
thomastjeffery wrote: post #763

Earlier quoted context omitted.

And why do people prefer renting to ownership? Because it's cheaper? Because the home buying process is too difficult? Owning a home, even if its value is deprecating, is fundamentally still more attractive than renting. You get to recoup at least some of your investment, and you don't have property management invading your personal life. Most people simply can't afford to buy homes in the first place.

I think many people enjoy the short term benefits of renting (spend money instead of saving for down payment) and undervalue the long term benefits of owning (lower housing cost when retired).

I'm sure many prefer it, but many also require it. Bundling the two groups is disingenuous.

Making ownership more accessible would attract a lot of prospective buyers, and getting rid of the landlord role and land investment would likely have that effect.

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

#800

Post by toss1 »

robertlagrant wrote: post #797
sbf501 wrote: post #659

Earlier quoted context omitted.

Please point to the "boon". If you mean people got to keep their jobs = boon, then I guess you are right. The problem is, wealth was transferred upstream, en masse, and not taxed anywhere near labor. Here is some data that solidly debunks your disguised claim of "trickle down": https://www.epi.org/publication/ceo-pay-has-grown-90-times-f... http://www.ibew.org/media-center/Articles/19Daily/1908/19082...

> Please point to the "boon". Sure. I said: > It's a boon to anyone whose job was created by it as well You then say: > If you mean people got to keep their jobs = boon No, I said the job in the first place is funded by investment. I couldn't have made it clearer. If investors don't invest in your startup/scaleup then there is no job in the first place. Nothing about being grateful for keeping your job. > The problem…

>> You will mislead casual readers by doing so.

Your entire post is misleading.

It contains the ASSUMPTION that the favorable capital tax rate (vs labor tax rate) is NECESSARY for the investment to happen.

This is obviously not the case. People with capital will want to deploy it so that it grows, as long as the tax rate on the profits is What we do not have is the curve - how high can the tax rate be set relative to the tax on labor income before investment is ACTUALLY discouraged?

Only an assumption, based on the obviously self-serving assertions of people who own capital, that higher tax rates will make them just sit on their money and not deploy it profitably.

As you can see above, I'm happy to debunk oversimplification & demonization from the LW or RW, but "trickly down" is pretty much what the RW called it when it was flogged as a concept in the '80s, that "freeing up capital" for the rich would trickle down to everyone in the economy. The ACTUAL result was the opposite. Ratios of executive vs worker pay only increased from ~70x to over 300x, and the share of the total GDP going to labor declined to the lowest point ever.

The actual fact of the matter is that with lowering tax rates on capital, the "boon" you speak of is actually available to fewer people than ever.

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