4 ms·

If long term stability is important to you, you should consider buying a condo. In my research, a condo is almost always positive NPV (relative to renting an a

If long term stability is important to you, you should consider buying a condo. In my research, a condo is almost always positive NPV (relative to renting an apartment) after 24 months. That would solve your issue with getting priced out after a couple renewal cycles. The payment would be steady (sans any special assessments).

ridaj 6y ago
Oh I'm all good where I am. Just pointing out what it does to the character of a neighborhood to have long-term renters stick around for the long haul. In rent-controlled markets, in my experience it's not unusual for long-term renters to enjoy significantly lower housing costs than if they were to buy an equivalent condo. I know that when I looked it was definitely the case for me unless I had bought with > 50% down. Property taxes alone would've represented half of my rent, HOA another bit, so I would've had to have a very low mortgage.
- Robotbeat 6y ago
  The thing you're talking about is the same as if people were owners. But the advantage is that an ownership driven market (see Singapore) is more dynamic and allows people to actually live in the city where they work instead of commuting for an hour. Noah Smith has other articles about how to do government-built but occupant owned housing like Singapore. It's far better than rent-control, which tends to privilege existing tenants at the expense of people who need jobs but weren't lucky enough to have been born in a rent-controlled apartment.
  - ridaj 6y ago
    I'll have to check them out. I somehow doubt that Americans will trust their governments to build housing to their liking. It'd take some serious image turnaround for middle class Americans to be attracted to the notion of government housing... What happens in practice in the US today with government-backed mortgages is effectively government subsidized owner-occupied housing, but development is privatized.
    - nobody9999 6y ago
      Public/private partnerships can and do work. I know many folks who live in or grew up in such developments[0]. And such housing provides decent amenities and is safe, comfortable and generally well run. There is no reason why we can't do this more, or why government should have no involvement. It works, and we know it works, because we're already doing it. [0]https://en.wikipedia.org/wiki/Mitchell-Lama_Housing_Program https://en.wikipedia.org/wiki/Mitchell-Lama_Housing_Program
  - SpicyLemonZest 6y ago
    Government-built housing can work, no doubt, but it's just not going to be feasible in the US until the cultural memory of "the projects" has passed.
    - Robotbeat 6y ago
      A key to this is that it may be government-built, but people actually own them. And they're actually good. They're not just rent-controlled super cheap living space.
- stickyricky 6y ago
  Sharing my experience. In Miami the tax is 1.12%. My heuristic is mortgage is 1/2, HOA + Property tax is 1/2. Don't know if that scales to your market but it seems to hold true here. I'm not sure how rent control works in your city/country. But in my experience, you buy in at a market rate and then the amount of increase is capped by the government. I've not heard of people renting an apartment below market rate (for the first month) unless its classified as "affordable housing" which carries statutory requirements for the landlord and the tenet.
  - ridaj 6y ago
    Same. On year 1 out might be even, but all it takes is a couple years of strong property price rise (while your rent stays more or less pegged to what it was) to change the calculus in favor of staying under rent control.

ridaj 6y ago

Oh I'm all good where I am. Just pointing out what it does to the character of a neighborhood to have long-term renters stick around for the long haul. In rent-controlled markets, in my experience it's not unusual for long-term renters to enjoy significantly lower housing costs than if they were to buy an equivalent condo. I know that when I looked it was definitely the case for me unless I had bought with > 50% down. Property taxes alone would've represented half of my rent, HOA another bit, so I would've had to have a very low mortgage.

Robotbeat 6y ago
The thing you're talking about is the same as if people were owners. But the advantage is that an ownership driven market (see Singapore) is more dynamic and allows people to actually live in the city where they work instead of commuting for an hour. Noah Smith has other articles about how to do government-built but occupant owned housing like Singapore. It's far better than rent-control, which tends to privilege existing tenants at the expense of people who need jobs but weren't lucky enough to have been born in a rent-controlled apartment.
- ridaj 6y ago
  I'll have to check them out. I somehow doubt that Americans will trust their governments to build housing to their liking. It'd take some serious image turnaround for middle class Americans to be attracted to the notion of government housing... What happens in practice in the US today with government-backed mortgages is effectively government subsidized owner-occupied housing, but development is privatized.
  - nobody9999 6y ago
    Public/private partnerships can and do work. I know many folks who live in or grew up in such developments[0]. And such housing provides decent amenities and is safe, comfortable and generally well run. There is no reason why we can't do this more, or why government should have no involvement. It works, and we know it works, because we're already doing it. [0]https://en.wikipedia.org/wiki/Mitchell-Lama_Housing_Program https://en.wikipedia.org/wiki/Mitchell-Lama_Housing_Program
- SpicyLemonZest 6y ago
  Government-built housing can work, no doubt, but it's just not going to be feasible in the US until the cultural memory of "the projects" has passed.
  - Robotbeat 6y ago
    A key to this is that it may be government-built, but people actually own them. And they're actually good. They're not just rent-controlled super cheap living space.
stickyricky 6y ago
Sharing my experience. In Miami the tax is 1.12%. My heuristic is mortgage is 1/2, HOA + Property tax is 1/2. Don't know if that scales to your market but it seems to hold true here. I'm not sure how rent control works in your city/country. But in my experience, you buy in at a market rate and then the amount of increase is capped by the government. I've not heard of people renting an apartment below market rate (for the first month) unless its classified as "affordable housing" which carries statutory requirements for the landlord and the tenet.
- ridaj 6y ago
  Same. On year 1 out might be even, but all it takes is a couple years of strong property price rise (while your rent stays more or less pegged to what it was) to change the calculus in favor of staying under rent control.