2 ms·

I understand the renter dilemma. The goal would be to propel you towards home ownership. If taxes were higher on investment properties purchase prices would get

by sgc 7y ago

I understand the renter dilemma. The goal would be to propel you towards home ownership. If taxes were higher on investment properties purchase prices would get pushed down, thereby reducing the amount your landlord would need to charge for rent. Rent will go up with inflation regardless, since landlords optimize for profit. But all of a sudden there is less of a difference between what rent costs and a mortgage payment. it is easier to jump out of the renter's cycle. And that means less demand and lower rents for those who remain, creating a virtuous cycle. In the medium term (5 years plus) this would keep rents flat or lower, and reduce housing prices at the same time. At the same time there is a basic philosophy I espouse that all people have a right to a home and a piece of land, and unless absolutely necessary to society, they should not be renting from the government. I agree that there need to be several other programs in place to support lower income individuals, including in respect to primary residences, but that is an expanded conversation in a election year ;).

leetcrew 7y ago
so I have two main objections here. the first is that tax breaks for homeowners tend to benefit the middle class at the expense of those who are just below the threshold to qualify for a mortgage. unless you just give them the money or have the government guarantee their debt, this is going to be a problem. if your idea works really well and housing prices drop a lot, this could be a pretty small group, but it's still worth thinking about imo. my second (and very self-interested) reason, is that I don't want to be propelled towards home ownership. if I really wanted to I could buy a home now (and probably break even; I live in a low price-to-rent area), but I like renting. I'm quite happy in a 700 sq ft apartment, and I don't want the work that comes with a larger dwelling. I'm not exactly hurting for money, but I just don't see a compelling reason why the alternate version of me who bought a house deserves a tax break. I'm not sure I'm convinced by your argument that this policy would also lower my rent, but I'm not an economist so I can't really say. > At the same time there is a basic philosophy I espouse that all people have a right to a home and a piece of land, and unless absolutely necessary to society, they should not be renting from the government. just wanted to say I can certainly respect this, but I have a very different philosophy. land, especially in cities, is one of the only truly scarce things in the world, and its value depends almost entirely on what other people are doing near you. in our era of prosperity, I can agree that people should be entitled to a place to live, but I don't believe they should get to control a specific plot indefinitely.
- sgc 7y ago
  Rentals are almost 40% or the market so it will have a real effect. Of course this requires more changes to our systems. But given the terrible status of current US social structure, anything you do worth doing will likely fail without a number of changes to support it. There is nothing that makes 700 sq ft something you can't own and can only rent. That's a condo. People will still buy and sell depending on their life goals and situations. If you move, you will be more likely to sell rather than hold your old house for a rental. Refis will still exist, along with the pressures they create for some people to sell, etc.

by sgc 7y ago

leetcrew 7y ago

so I have two main objections here. the first is that tax breaks for homeowners tend to benefit the middle class at the expense of those who are just below the threshold to qualify for a mortgage. unless you just give them the money or have the government guarantee their debt, this is going to be a problem. if your idea works really well and housing prices drop a lot, this could be a pretty small group, but it's still worth thinking about imo. my second (and very self-interested) reason, is that I don't want to be propelled towards home ownership. if I really wanted to I could buy a home now (and probably break even; I live in a low price-to-rent area), but I like renting. I'm quite happy in a 700 sq ft apartment, and I don't want the work that comes with a larger dwelling. I'm not exactly hurting for money, but I just don't see a compelling reason why the alternate version of me who bought a house deserves a tax break. I'm not sure I'm convinced by your argument that this policy would also lower my rent, but I'm not an economist so I can't really say. > At the same time there is a basic philosophy I espouse that all people have a right to a home and a piece of land, and unless absolutely necessary to society, they should not be renting from the government. just wanted to say I can certainly respect this, but I have a very different philosophy. land, especially in cities, is one of the only truly scarce things in the world, and its value depends almost entirely on what other people are doing near you. in our era of prosperity, I can agree that people should be entitled to a place to live, but I don't believe they should get to control a specific plot indefinitely.

sgc 7y ago
Rentals are almost 40% or the market so it will have a real effect. Of course this requires more changes to our systems. But given the terrible status of current US social structure, anything you do worth doing will likely fail without a number of changes to support it. There is nothing that makes 700 sq ft something you can't own and can only rent. That's a condo. People will still buy and sell depending on their life goals and situations. If you move, you will be more likely to sell rather than hold your old house for a rental. Refis will still exist, along with the pressures they create for some people to sell, etc.