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You're being very unfair here. When you choose a place to live you are not only choosing the structure in which you reside, you are choosing the surrounding en
by lisper 6y ago
You're being very unfair here. When you choose a place to live you are not only choosing the structure in which you reside, you are choosing the surrounding environment as well. People's desire to keep the environment from changing too much extends beyond financial interests. I live in a quiet suburban neighborhood, and I want it to remain a quiet suburban neighborhood even if the value of my house drops.
In fact, I would love to see the value of my house drop, along with the value of all the houses around me, because that would make it easier for me to move locally and improve some of the sub-optimal features of my current situation, not least of which is that my house is much too big for my needs. But I can't move to a smaller house because the tax hit I would take makes it cost more than I can justify. The smaller houses around me now cost more than our house did when we bought it, so if we move we take both a one-time capital gains hit and an ongoing property tax hit. None of that would happen if houses depreciated like cars.
UPDATE: Please take note that I am not saying I have any kind of right to keep my neighborhood from changing, only that my desire to keep it from changing is not purely financial. (In fact, in my case, it is the exact opposite!)
- sokoloff 6y agoIf your gains are less than $250K (single) or $500K (married-filing-jointly), you've owned it for 2 years, and you've lived there 2 of the last 5 years, your gains are excluded federally. In general, the structure does depreciate very slowly (in real dollars) and the land appreciates in value (at least in desirable areas), typically more than swamping the slight depreciation on the structure.
- lisper 6y agoWe live in Northern California. We bought this house at the bottom of the 2008 crash. Our gains are considerably more than the exclusion limit. (One of the many stupid things about the tax code is that the exclusion limit is not indexed to time.)
- cltby 6y agoThe structure itself does depreciate (ask any landlord!). It's the land value that's surging.
- lisper 6y agoSure, but the structure and the land are tightly bound. I can't buy or sell a structure without also buying or selling the land that it sits on, so this is kind of irrelevant.
- throwaway0a5e 6y agoCommercial structures often appreciate as an area gentrifies and starts using legislation to kick out industrial activity in favor of coffee shops and other consumer facing stuff. So the facilities (and permission to operate them) appreciate like there's no tomorrow.
- shuckles 6y agoUnfortunately (for you), your desire for a quiet suburban neighborhood should not give you the ability to immiserate other people who want to live there by prohibiting the construction of homes for them. Do you value your quiet suburban neighborhood enough to buy and pay property taxes on the whole block or subdivision? If not, I recommend you look for estates on acreage in remote areas.
- majormajor 6y agoYou could reframe the opposition as "your money shouldn't mean you can just come into our area and remake it however you want." Neither side is purely unsympathetic here.
- shuckles 6y agoWas one’s single family home a naturally occurring building? What gave one the right to build it? Your both sides argument sounds plausible but it’s not-sensical.
- majormajor 6y agoThat's sorta just how private property works. At some point, land was unowned, structures were unbuilt, etc. Ever since then, we've put the "rights" in the hands of the current owners and/or the government they live under... Short of arguing from a purely socialist or communist approach, saying the current owner's preferences matter less than the hypothetical would-be future occupants of the area is the non-sensical part, I think.
- shuckles 6y agoAnd who was compensated when those rights were taken away from property owners by the invention of zoning in the early 1900s and down zoning in the mid 1900s? In addition, you are confusing owning a particular plot of land with rights over all neighboring plots. The latter is distinctly not your private property.
- imtringued 6y ago>You're being very unfair here. When you choose a place to live you are not only choosing the structure in which you reside, you are choosing the surrounding environment as well. The expectation that one can settle down and expect their city to be built to a finished state which is kept frozen in time is an incredibly damaging mindset. City planners have to predict what is going to happen in the future decades ahead. People didn't do this 100 years ago. They didn't do this thousands of years ago. They did something far simpler. They built their city and then they rebuilt their city, house by house, incrementally, one step at a time over decades to match changing needs. Here's a talk by Charles Marohn regarding this topic: https://youtu.be/Em7nqDqQ8oM https://youtu.be/Em7nqDqQ8oM
- majormajor 6y ago> City planners have to predict what is going to happen in the future decades ahead. Current trend: single family houses have shot up in demand due to remote work. So is the prescription "tear down single family houses"? Seems like cities that do that are just going to push people even faster towards other areas which aren't so saturated. If this trend continues some sort of balancing between not just SF/NY but even Dallas/Austin and smaller, more rural areas, is inevitable. There just isn't enough land for more single family houses in the most popular cities! But reacting as if consumer preferences for housing type doesn't matter seems like a recipe for putting yourself into an even worse position long-term.
- nomel 6y agoLooking at the listings in the Bay Area, condos are more expensive than homes, with the same square footage, since they're new and "luxury". I question if tearing down houses for something high density would make anything cheaper.
- spiralx 6y agoPeople are moving into the city and buying those luxury condos instead of buying houses in existing neighbourhoods and driving up prices there.