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Cars are expensive but aren't investments; they're depreciating assets. In Tokyo, housing is a depreciating asset too. In the US, housing is an appreciating in

by rspeer 8y ago

Cars are expensive but aren't investments; they're depreciating assets. In Tokyo, housing is a depreciating asset too. In the US, housing is an appreciating investment because we've made that a political axiom, and because homeowners hold political power that let them fight any policy that would make housing cheaper.

mmt 8y ago
> Cars are expensive but aren't investments; they're depreciating assets. There's a case to be made that the two aren't mutually exclusive. Sure, by the traditional definition of "investment", a profit or gain is required, but a broader understanding includes considerations such as risk and loss avoidance (i.e. hedging). Even under the traditional/strict definition, a car could be considered an investment if the loss from depreciation is less than the loss from not having it available (e.g. having to pay more for rideshare services). That said, with housing, it's important to remember there are two components, the depreciating part (the structure) and the land (location). The latter both doesn't depreciate and is usually the part people are investing in, at least in high-cost areas.
puranjay 8y ago
Cars are a depreciating asset because you can always manufacture more of them Housing appreciates because land supply is limited in big cities. You can't manufacture more land
- rspeer 8y ago
  How simplistic. America has enough land. Vast swaths of it are empty. What we don't have enough of is density in the places where people actually want to be, and that's not a natural limit. You could make more density, if it weren't illegal in all of these desirable places. And I just mentioned Tokyo, which actually does have serious land constraints but does zoning and transit well. (And where they are making more land.) Ordinary people can afford homes there and almost nobody is homeless. "They're not making any more land" isn't a relevant thing about urbanism, it's just a cliche that a realtor says to convince you to buy.
  - puranjay 8y ago
    It's not as simple as merely lifting regulations to support high density housing. The underlying infrastructure has to be able to support that density as well. Most cities would fail to function if they all had the same density as New York or Tokyo To solve the infrastructure problem, you have to, again, invest billions.
- jeffwass 8y ago
  There’s more to it than that. You can build more houses just as easily as building more cars. Houses also appreciate in areas where undeveloped land is in abundance. The disparity comes from the lifespan and relative ongoing maintenance for each. A car depreciates because it has high long-term maintenance costs due to wear and tear. A 10 year-old car more expensive to maintain than a 2 year-old car. Almost everything in a car eventually needs to be replaced. The exception is at the high-end where some cars become collectors items after 30+ years and will then appreciate due to rarity (as per your original argument). Houses properly built will literally last centuries. My old house in Baltimore is over 100 years old.

by rspeer 8y ago

mmt 8y ago

> Cars are expensive but aren't investments; they're depreciating assets. There's a case to be made that the two aren't mutually exclusive. Sure, by the traditional definition of "investment", a profit or gain is required, but a broader understanding includes considerations such as risk and loss avoidance (i.e. hedging). Even under the traditional/strict definition, a car could be considered an investment if the loss from depreciation is less than the loss from not having it available (e.g. having to pay more for rideshare services). That said, with housing, it's important to remember there are two components, the depreciating part (the structure) and the land (location). The latter both doesn't depreciate and is usually the part people are investing in, at least in high-cost areas.

puranjay 8y ago

Cars are a depreciating asset because you can always manufacture more of them Housing appreciates because land supply is limited in big cities. You can't manufacture more land

rspeer 8y ago
How simplistic. America has enough land. Vast swaths of it are empty. What we don't have enough of is density in the places where people actually want to be, and that's not a natural limit. You could make more density, if it weren't illegal in all of these desirable places. And I just mentioned Tokyo, which actually does have serious land constraints but does zoning and transit well. (And where they are making more land.) Ordinary people can afford homes there and almost nobody is homeless. "They're not making any more land" isn't a relevant thing about urbanism, it's just a cliche that a realtor says to convince you to buy.
- puranjay 8y ago
  It's not as simple as merely lifting regulations to support high density housing. The underlying infrastructure has to be able to support that density as well. Most cities would fail to function if they all had the same density as New York or Tokyo To solve the infrastructure problem, you have to, again, invest billions.
jeffwass 8y ago
There’s more to it than that. You can build more houses just as easily as building more cars. Houses also appreciate in areas where undeveloped land is in abundance. The disparity comes from the lifespan and relative ongoing maintenance for each. A car depreciates because it has high long-term maintenance costs due to wear and tear. A 10 year-old car more expensive to maintain than a 2 year-old car. Almost everything in a car eventually needs to be replaced. The exception is at the high-end where some cars become collectors items after 30+ years and will then appreciate due to rarity (as per your original argument). Houses properly built will literally last centuries. My old house in Baltimore is over 100 years old.