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> If we want to keep housing affordable, we'll have to settle for valuations staying pretty much constant in real dollars forever This is basically the argumen

> If we want to keep housing affordable, we'll have to settle for valuations staying pretty much constant in real dollars forever This is basically the argument for buying into a co-op rather than buying an apartment. You aren't allowed to flip them for a profit, which means they're less expensive because you're giving up optionality. (At least when they actually are implemented as originally intended.) To me this makes a ton of sense, because there are a lot of benefits to home ownership for both the individual and society, but real estate generally isn't a good place to put investible dollars unless you're super wealthy and just want some (relatively) predictable income from renters. What we really need though is public housing for the middle class and upper middle class, rather than just for low-income families. Right now public housing is basically just a scam to transfer money from the middle class to the super wealthy by using money from the middle class to subsidize labor at below a living wage, when in reality everyone needs a house so it's a textbook example of a market where there should be a public option.

bko 8y ago
Co ops are just apartments whose land is owned by a corporation. The corporation usually has a perpetual interest only loan on the land. So when you buy a co op you are leasing the land and own a share in the apartment. You tend to give up options but no one really benefits. I don’t know other markets but condos in nyc are prob 30-50% more valuable in part due to these options. It’s cheaper but only because it’s objectively worse as anyone who had to deal with a co op board can attest. You can make things cheaper by making hem less valuable sure, but that’s just destroying value for no reason. Imagine you don’t like how expensive cars are so you make it so that you need a background check and waiting period to buy a car. Will new car prices go down? Probably, but that’s not a good thing
- quadrangle 8y ago
  A cohousing community done well can be a dramatically superior quality of life worth extra cost. https://www.youtube.com/watch?v=DmWrx0ntATU https://www.youtube.com/watch?v=DmWrx0ntATU
  - asdfasgasdgasdg 8y ago
    That's cool, but that's also not what a coop is, at least in the context of this thread.
    - quadrangle 8y ago
      The living arrangements in the video are absolutely co-ops. I'm not sure I get how the context is different, other than that there exists other mediocre (or worse) cohousing co-ops.
- cm2012 8y ago
  I live in a super well run coop in NYC, and it's cheap.
- zby 8y ago
  Shouldn't it be cooperative instead of corporation?
- CPLX 8y ago
  “No one benefits” is not an accurate statement at all. The purpose of a coop is to be able to choose your neighbors in the building. The reasons for doing so could be indefensible, like keeping out blacks and Jews, or they could be things like ensuring the financial health of the building, blocking people who will engage in endless construction, or avoiding drama by excluding celebrities that draw paparazzi.
stevekemp 8y ago
In Helsinki each building is owned by a maintenance company - a company that takes fees to cover basic expenses, but which isn't allowed to generate a profit. You don't buy a flat, as such, instead you buy shares in the holding-company. In short all flats/apartments are cooperatives, but still profit occurs when they're bought and sold. The structure and profit/loss are unrelated.
- buzer 8y ago
  There isn't really any law that disallows housing cooperative from generating profit per se , but generally there isn't any reason for it to do so. Some very old ones actually do pay dividends and do not ask fees from owners, but that usually requires that the cooperative is debt free and has a way to generate income (i.e. owns some of the apartments/business premises that it rents out) and that it has saved up enough to pay off planned maintenances.
  - stevekemp 8y ago
    Interesting stuff, thanks for the clarification. (I suspect I'm going to find out a lot more about this stuff soon, as I own a studio which is due for some pipe-work .. Joy!)
- TheCoelacanth 8y ago
  That sounds similar in practice to a "condominium" in the US. You own your specific apartment and also a share in the whole building.
asdfasgasdgasdg 8y ago
> You aren't allowed to flip them for a profit You most definitely are! At least in New York City. There tends to be a flip tax, but that is just a mechanism of funding the corporation, and it's not the reason prices are lower. (Prices are lower because coops tend to be much less flexible about renting. Many forbid it entirely, and those that allow it will have limits like at most two years out of every five. That basically means there's a class of buyer -- real estate investors -- who have no use for coop units. Lower demand at a fixed level of supply leads to lower price.)
- Alex3917 8y ago
  > There tends to be a flip tax But that can take the form of 90% of any increase over the purchase price if you sell within the first five years, which effectively removes any economic reason to purchase for short term speculation.
  - asdfasgasdgasdg 8y ago
    It can, but I've never heard of a building where this is actually the case.
nkoren 8y ago
In Singapore, 90% of the housing stock is public housing -- including plenty of fairly upper-class developments. They public housing in a variety of sizes and styles, and to suit every income bracket, thus ensuring that there is no stigma associated with it. Then they use their control over the housing stock to engage in some completely overt social-engineering -- ensuring that no one neighbourhood becomes too concentrated in a single ethnic, religious, or economic bracket. This is a very long way from how the West does things, but I've got to say that it works exceedingly well there. (Disclaimer: not an endorsement of All Things Singapore.)
- thirteen37 8y ago
  To relate it to the main article: public housing in Singapore is affordable and an investment. You can sell it and prices are somewhat market driven but with complicated taxes and limitations to prevent speculation (flipping). It's affordable because, as public housing, there are numerous subsidies, incentives, etc that the government provides to make the initial down payment and subsequent installments as easy as possible.
  - puranjay 8y ago
    A friend who is in the Singapore market right now mentionef that his mortgage payments would be nearly the same as his rent, thanks to the incentives the government gives for home ownership
- nikanj 8y ago
  Singapore also has absolutely massive fines for using your home as an AirBnB. In a well-functioning market AirBnB doesn’t matter much, but when supply is artificially constrained via zoning etc, the $150-per-night income from your $1500 per month home is hard to beat.
  - chii 8y ago
    > massive fines for using your home as an AirBnB. it still exists, and you avoid it by claiming to be a relative visiting. Just make sure you don't bring large amounts of luggage thru the front lobby, or make a nuisance in the building.

bko 8y ago

Co ops are just apartments whose land is owned by a corporation. The corporation usually has a perpetual interest only loan on the land. So when you buy a co op you are leasing the land and own a share in the apartment. You tend to give up options but no one really benefits. I don’t know other markets but condos in nyc are prob 30-50% more valuable in part due to these options. It’s cheaper but only because it’s objectively worse as anyone who had to deal with a co op board can attest. You can make things cheaper by making hem less valuable sure, but that’s just destroying value for no reason. Imagine you don’t like how expensive cars are so you make it so that you need a background check and waiting period to buy a car. Will new car prices go down? Probably, but that’s not a good thing

quadrangle 8y ago
A cohousing community done well can be a dramatically superior quality of life worth extra cost. https://www.youtube.com/watch?v=DmWrx0ntATU https://www.youtube.com/watch?v=DmWrx0ntATU
- asdfasgasdgasdg 8y ago
  That's cool, but that's also not what a coop is, at least in the context of this thread.
  - quadrangle 8y ago
    The living arrangements in the video are absolutely co-ops. I'm not sure I get how the context is different, other than that there exists other mediocre (or worse) cohousing co-ops.
cm2012 8y ago
I live in a super well run coop in NYC, and it's cheap.
zby 8y ago
Shouldn't it be cooperative instead of corporation?
CPLX 8y ago
“No one benefits” is not an accurate statement at all. The purpose of a coop is to be able to choose your neighbors in the building. The reasons for doing so could be indefensible, like keeping out blacks and Jews, or they could be things like ensuring the financial health of the building, blocking people who will engage in endless construction, or avoiding drama by excluding celebrities that draw paparazzi.

stevekemp 8y ago

In Helsinki each building is owned by a maintenance company - a company that takes fees to cover basic expenses, but which isn't allowed to generate a profit. You don't buy a flat, as such, instead you buy shares in the holding-company. In short all flats/apartments are cooperatives, but still profit occurs when they're bought and sold. The structure and profit/loss are unrelated.

buzer 8y ago
There isn't really any law that disallows housing cooperative from generating profit per se , but generally there isn't any reason for it to do so. Some very old ones actually do pay dividends and do not ask fees from owners, but that usually requires that the cooperative is debt free and has a way to generate income (i.e. owns some of the apartments/business premises that it rents out) and that it has saved up enough to pay off planned maintenances.
- stevekemp 8y ago
  Interesting stuff, thanks for the clarification. (I suspect I'm going to find out a lot more about this stuff soon, as I own a studio which is due for some pipe-work .. Joy!)
TheCoelacanth 8y ago
That sounds similar in practice to a "condominium" in the US. You own your specific apartment and also a share in the whole building.

asdfasgasdgasdg 8y ago

> You aren't allowed to flip them for a profit You most definitely are! At least in New York City. There tends to be a flip tax, but that is just a mechanism of funding the corporation, and it's not the reason prices are lower. (Prices are lower because coops tend to be much less flexible about renting. Many forbid it entirely, and those that allow it will have limits like at most two years out of every five. That basically means there's a class of buyer -- real estate investors -- who have no use for coop units. Lower demand at a fixed level of supply leads to lower price.)

Alex3917 8y ago
> There tends to be a flip tax But that can take the form of 90% of any increase over the purchase price if you sell within the first five years, which effectively removes any economic reason to purchase for short term speculation.
- asdfasgasdgasdg 8y ago
  It can, but I've never heard of a building where this is actually the case.

nkoren 8y ago

In Singapore, 90% of the housing stock is public housing -- including plenty of fairly upper-class developments. They public housing in a variety of sizes and styles, and to suit every income bracket, thus ensuring that there is no stigma associated with it. Then they use their control over the housing stock to engage in some completely overt social-engineering -- ensuring that no one neighbourhood becomes too concentrated in a single ethnic, religious, or economic bracket. This is a very long way from how the West does things, but I've got to say that it works exceedingly well there. (Disclaimer: not an endorsement of All Things Singapore.)

thirteen37 8y ago
To relate it to the main article: public housing in Singapore is affordable and an investment. You can sell it and prices are somewhat market driven but with complicated taxes and limitations to prevent speculation (flipping). It's affordable because, as public housing, there are numerous subsidies, incentives, etc that the government provides to make the initial down payment and subsequent installments as easy as possible.
- puranjay 8y ago
  A friend who is in the Singapore market right now mentionef that his mortgage payments would be nearly the same as his rent, thanks to the incentives the government gives for home ownership
nikanj 8y ago
Singapore also has absolutely massive fines for using your home as an AirBnB. In a well-functioning market AirBnB doesn’t matter much, but when supply is artificially constrained via zoning etc, the $150-per-night income from your $1500 per month home is hard to beat.
- chii 8y ago
  > massive fines for using your home as an AirBnB. it still exists, and you avoid it by claiming to be a relative visiting. Just make sure you don't bring large amounts of luggage thru the front lobby, or make a nuisance in the building.