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Got it! Sorry for misunderstanding earlier. Now that I understand, it's clear that your position is both nuanced and subjective (I had previously thought you he

Got it! Sorry for misunderstanding earlier. Now that I understand, it's clear that your position is both nuanced and subjective (I had previously thought you held a different view which would have been falsifiable). I also think that the way you've framed this with the concept of two opposed purposes -- the purpose of deriving economic utility from a house as an asset, and the purpose of people having a place to live -- is actually a usefully simplistic way of considering the tension in the housing market. It helps to make it clear that there could be instances where a landlord's incentives are misaligned with society's incentives. If you grant me for a second that society is better served by having no homelessness and that homelessness can often be the trigger which leads to other awful events, I think the question becomes one of how policymakers should intercede on behalf of tenants, not if. Germany and the UK are two very interesting comparisons. You rightly point out that Germany is not just tenant-centric in its "worst case" scenarios (evictions and other life-deranging events), but also in the day-to-day of altering the interior of a property, rent caps (but not control!), longer leases, etc. The UK's approach has been somewhat different (and very muddled). Before the 1980s in the UK mom & pop landlords didn't really exist, and then buy-to-let mortgages began popping up as products, sparking a wave of amateur landlords which culminated in the late eighties with the creation of ASTs to recognise the need for a more sophisticated set of arrangements between increasingly amateur landlords and tenants. But in my view beyond creating a legal framework for the private sector which ensures tenants are not preyed upon somehow (e.g. a landlord being able to set a substantially below-market rent and then create their own unfair punitive measures for noise or something, resulting in tenants being locked into a cycle of debt), the obligation of the state is to ensure that there are alternatives to this market because, as I think we agree, it's something approaching a human right. So if I look at the UK's approach in the aggregate (rather than just the meddling I see happening in the private sector), I like some of what I see! The state provides housing if you're unable to access it either through renting in the private sector or ownership. The state I believe is increasingly moving towards building its own stock of new dwellings rather than trying to incentivise the private sector to do something it isn't equipped to. And the legal framework to protect tenants is fairly robust: Section 8 and Section 21 are pretty tenant-centric IMO, and if you fall out of the private rental sector there is immediate and ~adequate help. I think the area in which we differ is that I believe that instead of augmenting and limiting and fannying about with a free market, the state is best served by creating a compelling alternative. In many ways I equate the state's obligations to intervene in curbing out-and-out capitalism for pursuit of the greater good to its own kind of monopolistic power. (E.g. bank bailouts served society more than the invisible hand turning into an invisible fist.) I believe the state should be buying land and building housing in sufficient quantities at a neutral or negative margin, and providing a genuine alternative to the private rental sector, because it's clear that whilst the moral obligation towards housing people is broadly considered to be paramount, wholesale tinkering with the private sector status quo is yielding inefficient improvements to the lives of those who need help the most. So I think I totally agree with you about the high level priorities here, but I think the approach should be radically different.

marcus_holmes 6y ago
I'm glad we agree that people should have somewhere to live, and that if a society isn't providing that for its citizens, then that society is failing. This is apparently not a view shared by a lot of people. However, there's also the other side of the situation, one that reflects TFA. Huge numbers of ordinary people have been lulled into spending vast amounts of money buying property in the patently false belief that property values never go down over the long term. In other words, that property investing is "safe". The UK and the USA have seen a couple of crashes where over-leveraged property investors have gone broke. Australia hasn't yet. When it does, there will definitely be demands from hard-hit Aussie Battlers trapped in underwater mortgages for the government to help them out. Does our society have an obligation to rescue property investors who are on the verge of bankruptcy? There is form here, of course. Banks were rescued when their bets on the property market went bad. If them, why not anyone else? Treating property as a consumer-grade investment is doing harm to our society(ies). Change my mind ;)
- jelliclesfarm 6y ago
  In the United States, housing investment is a speculative activity because : 1. Govt encourages higher home prices because they can avail higher property taxes 2. Investment by foreign interests and sometimes this is used to launder money. Leading to inflating home prices resulting in higher taxes. Again, the govt encourages this. The problem here...in the US, at least..is the govt policy and not citizens who simply treat a commodity like real estate as a speculative commodity because that’s what’s offered to them.
- georgespencer 6y ago
  > Huge numbers of ordinary people have been lulled into spending vast amounts of money buying property in the patently false belief that property values never go down over the long term. I don't know how to evaluate that claim as it's currently phrased. Adjusting for inflation in either the US or UK we see that whilst house prices do of course go up and down, like any asset, the trend is upwards. So I would say that "property values never go down over the long term" is true-ish. The data says that if I put a gun to your head and said "I'm going to select a house at random in the UK or USA: will its value increase or decrease over the next twenty years?" you would be advised to say "Increase" (before asking a bunch of questions about whether this is really the most efficient way to determine whether someone lives or dies). > The UK and the USA have seen a couple of crashes where over-leveraged property investors have gone broke That's different from property values not going down in the long term, right? > Does our society have an obligation to rescue property investors who are on the verge of bankruptcy? This doesn't scan to me as I've understood it. Is the logic that because people have been "lulled into believing" that property is "safe", there's an obligation to rescue them because of their inexpertness? I guess that's suggestive of the fact that you do not think they would have entered the market had they known about the possibility of it happening, right? (Assuming that anyone who was told that it would DEFINITELY happen to them would not have entered the market.) > There is form here, of course. Banks were rescued when their bets on the property market went bad. If I understand your logic then banks are professionals getting the market wrong, which implies a much more unlikely and unpredictable disaster. In any case I think the argument here is chiefly utilitarian: far more people benefit from a bank bailout than individual property investors being bailed out. > Treating property as a consumer-grade investment is doing harm to our society. From the position you've outlined above I think it's more likely that some form of fiscal illiteracy is the real issue, not the democratising of financial markets so that consumers can participate in them.

marcus_holmes 6y ago

I'm glad we agree that people should have somewhere to live, and that if a society isn't providing that for its citizens, then that society is failing. This is apparently not a view shared by a lot of people. However, there's also the other side of the situation, one that reflects TFA. Huge numbers of ordinary people have been lulled into spending vast amounts of money buying property in the patently false belief that property values never go down over the long term. In other words, that property investing is "safe". The UK and the USA have seen a couple of crashes where over-leveraged property investors have gone broke. Australia hasn't yet. When it does, there will definitely be demands from hard-hit Aussie Battlers trapped in underwater mortgages for the government to help them out. Does our society have an obligation to rescue property investors who are on the verge of bankruptcy? There is form here, of course. Banks were rescued when their bets on the property market went bad. If them, why not anyone else? Treating property as a consumer-grade investment is doing harm to our society(ies). Change my mind ;)

jelliclesfarm 6y ago
In the United States, housing investment is a speculative activity because : 1. Govt encourages higher home prices because they can avail higher property taxes 2. Investment by foreign interests and sometimes this is used to launder money. Leading to inflating home prices resulting in higher taxes. Again, the govt encourages this. The problem here...in the US, at least..is the govt policy and not citizens who simply treat a commodity like real estate as a speculative commodity because that’s what’s offered to them.
georgespencer 6y ago
> Huge numbers of ordinary people have been lulled into spending vast amounts of money buying property in the patently false belief that property values never go down over the long term. I don't know how to evaluate that claim as it's currently phrased. Adjusting for inflation in either the US or UK we see that whilst house prices do of course go up and down, like any asset, the trend is upwards. So I would say that "property values never go down over the long term" is true-ish. The data says that if I put a gun to your head and said "I'm going to select a house at random in the UK or USA: will its value increase or decrease over the next twenty years?" you would be advised to say "Increase" (before asking a bunch of questions about whether this is really the most efficient way to determine whether someone lives or dies). > The UK and the USA have seen a couple of crashes where over-leveraged property investors have gone broke That's different from property values not going down in the long term, right? > Does our society have an obligation to rescue property investors who are on the verge of bankruptcy? This doesn't scan to me as I've understood it. Is the logic that because people have been "lulled into believing" that property is "safe", there's an obligation to rescue them because of their inexpertness? I guess that's suggestive of the fact that you do not think they would have entered the market had they known about the possibility of it happening, right? (Assuming that anyone who was told that it would DEFINITELY happen to them would not have entered the market.) > There is form here, of course. Banks were rescued when their bets on the property market went bad. If I understand your logic then banks are professionals getting the market wrong, which implies a much more unlikely and unpredictable disaster. In any case I think the argument here is chiefly utilitarian: far more people benefit from a bank bailout than individual property investors being bailed out. > Treating property as a consumer-grade investment is doing harm to our society. From the position you've outlined above I think it's more likely that some form of fiscal illiteracy is the real issue, not the democratising of financial markets so that consumers can participate in them.