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Housing should not be a financial instrument. There's nothing more to it than that. Think about this: "every investment property requires a renter". It's the

Housing should not be a financial instrument. There's nothing more to it than that. Think about this: "every investment property requires a renter". It's the perfect embodiment of social/financial divide. Radical idea, extremely unpalatable to many people: governments should ensure that anyone who wants to buy a house can buy a house by lending them the money. Consider Denmark doing exactly this: https://www.smh.com.au/business/banking-and-finance/denmark-offers-homeowners-20-year-loans-at-a-fixed-interest-rate-of-zero-20210106-p56rzj.html https://www.smh.com.au/business/banking-and-finance/denmark-... I think it is a Russian saying "the fed do not understand the starving". i.e. anyone who owns a house has no empathy for those who don't. But why the fuck should everyone not own a house who wants to? The disabled should be able to. Teachers should be able to. Firemen and policemen should be able to. Childcare workers should be able to. Instead, many people simply will never be able to own a house. And the people who make the decisions - the politicians - are "the fed" - they all own at least one house often many. Here in Australia the governments are all on a mission to make housing ever more expensive - fuck them. I also can't see a single reason why overseas buyers should be allowed to buy real estate unless they are citizens or permanent residents. I'm hoping one day governments will be voted out because people can't buy a house. Housing...... should be for people and should be the basis of an equitable society in which everyone gets to own where they live. Instead, all that counts here in Australia anyway, is .... money money money money.

mhh__ 6y ago
In a certain way housing isn't a financial thing when it should be i.e. I look at my estate agent that I piss money into, they do absolutely nothing and are generally totally incompetent because they don't need to be. I believe in private property as a right, fundamentally so, but it's just ridiculous at the moment - especially if you consider that voting systems are usually biased towards those of us who are older, richer, and often suburban or rural - this massively skews the incentives for politicians.
seibelj 6y ago
Money flows to good investments. If it flows internationally it’s because investors without citizenship trust your country’s rule of law in respect to non-citizens. Violating that to seize foreigners’ assets, or force them to sell at a discount, works once but ultimately leaves the country worse off IMO. I hope some smaller countries start experimenting with true socialist policies. We need a Venezuela every few years to remind us why it’s such a terrible idea.
- epistasis 6y ago
  A lot of what makes US real estate a "good investment" is that powerful interests protect their investment by reducing to allow more productive use of a scarce resource. This is explicitly cited in the private equity SEC filings that buy single family homes and rent them out: the PE forms know that rents will continue to rise because existing homeowners control the political process that would prevent that rise: allowing more housing. This is classic economic rentierism that harms everyone that is not profiting from the artificial scarcity.
saddlerustle 6y ago
Houses and rent are expensive because there's not enough houses in the places people want houses. You're not paying for the house, you're paying for someone else not to live there. Governments further subsidising homeownership will only make them more expensive.
- andrewstuart 6y ago
  There's enough houses. There just shouldn't be people owning more than 2.
  - yardstick 6y ago
    I agree with the sentiment but disagree with the 2 house limit. For example a family holiday house should be ok. I would put the limit around 10 homes, and if any are rentals then any capital gains should be taxed more harshly unless sold to someone who will owner occupy for at least say 3 years. Yes I’m sure there are loopholes in what I’m describing but it’s the general concept I’m trying to show.
  - adrianN 6y ago
    I'm sure that there are not enough houses in central Tokyo for everyone who wants to live in central Tokyo.
  - whatshisface 6y ago
    Without landlords, how would I be able to rent a house? Would I have to get loans whenever I moved, even if temporarily? All that would do is replace a mix of landlords and bankers with bankers. Renting money to buy something that you later sell to return the money is the same as renting the thing directly, except you're dealing with a huge bank instead of a midsize management company / wealthy owner-manager.
    - jjav 6y ago
      > Renting money to buy something that you later sell to return the money is the same as renting the thing directly Largely true, except that by renting it directly you're also paying the additional profit margin for the middleman who took out the mortgage (rented the money) for you to be able to rent it directly.
pdonis 6y ago
> governments should ensure that anyone who wants to buy a house can buy a house by lending them the money. We already have that in the US. And it helped to crash the economy back in 2008. (Yes, technically the government just prints the money and on paper it's private financial institutions doing the lending. Same difference.)
- Daho0n 6y ago
  If you look at Denmark's way (GP's example) then it is nothing like the loans you mention. The government decides how the loans are put together and buyers can pick between them. None of them are like the ones from the crash.
  - pdonis 6y ago
    > None of them are like the ones from the crash. I dunno, negative central bank rates sounds a lot like the financial insanity that caused the crash to me. I guess we'll just have to see how it plays out.
darkteflon 6y ago
Fellow Australian, agree 100%. I’ve watched housing policy transform the fabric of Australian life over my lifetime, in ways that are unequivocally bad.
Ericson2314 6y ago
Everyone should have housing in a decent location, but making this about ownership is silly. Land is a finite public good. Period. Denser buildings that no-one should entirely own are usually better. Taking a step back, flows are good, stocks are bad, unless there is a "real" capital investment at stake. Ownership, a single payment (ignoring morages) for indefinite rights, is a very weird financial instrument (note the contrast between "forever" and "single" transfer). It's funny fiction that just complicates the math. Rents, a flow, are actually good. The problem is not rents but rentierism, i.e. when rents flow to owners (to stock) regardless of productive investment. The solution is to move away from equity to debt base financing: The constructors of the home are paid a fixed profit (fixed interest) and nothing more (bounded stock), buildings are coops (no ownership distinct from residency) and rents continuously replenish the maintainence pool after the construction debt is paid (flows all the way down!). Again, speculation on finite land post construction investment recoupment is a cancer that has no place in the public sphere. People who like "actually existing capitalism" are being severely uncreative with the math.

mhh__ 6y ago

In a certain way housing isn't a financial thing when it should be i.e. I look at my estate agent that I piss money into, they do absolutely nothing and are generally totally incompetent because they don't need to be. I believe in private property as a right, fundamentally so, but it's just ridiculous at the moment - especially if you consider that voting systems are usually biased towards those of us who are older, richer, and often suburban or rural - this massively skews the incentives for politicians.

seibelj 6y ago

Money flows to good investments. If it flows internationally it’s because investors without citizenship trust your country’s rule of law in respect to non-citizens. Violating that to seize foreigners’ assets, or force them to sell at a discount, works once but ultimately leaves the country worse off IMO. I hope some smaller countries start experimenting with true socialist policies. We need a Venezuela every few years to remind us why it’s such a terrible idea.

epistasis 6y ago
A lot of what makes US real estate a "good investment" is that powerful interests protect their investment by reducing to allow more productive use of a scarce resource. This is explicitly cited in the private equity SEC filings that buy single family homes and rent them out: the PE forms know that rents will continue to rise because existing homeowners control the political process that would prevent that rise: allowing more housing. This is classic economic rentierism that harms everyone that is not profiting from the artificial scarcity.

saddlerustle 6y ago

Houses and rent are expensive because there's not enough houses in the places people want houses. You're not paying for the house, you're paying for someone else not to live there. Governments further subsidising homeownership will only make them more expensive.

andrewstuart 6y ago
There's enough houses. There just shouldn't be people owning more than 2.
- yardstick 6y ago
  I agree with the sentiment but disagree with the 2 house limit. For example a family holiday house should be ok. I would put the limit around 10 homes, and if any are rentals then any capital gains should be taxed more harshly unless sold to someone who will owner occupy for at least say 3 years. Yes I’m sure there are loopholes in what I’m describing but it’s the general concept I’m trying to show.
- adrianN 6y ago
  I'm sure that there are not enough houses in central Tokyo for everyone who wants to live in central Tokyo.
- whatshisface 6y ago
  Without landlords, how would I be able to rent a house? Would I have to get loans whenever I moved, even if temporarily? All that would do is replace a mix of landlords and bankers with bankers. Renting money to buy something that you later sell to return the money is the same as renting the thing directly, except you're dealing with a huge bank instead of a midsize management company / wealthy owner-manager.
  - jjav 6y ago
    > Renting money to buy something that you later sell to return the money is the same as renting the thing directly Largely true, except that by renting it directly you're also paying the additional profit margin for the middleman who took out the mortgage (rented the money) for you to be able to rent it directly.

pdonis 6y ago

> governments should ensure that anyone who wants to buy a house can buy a house by lending them the money. We already have that in the US. And it helped to crash the economy back in 2008. (Yes, technically the government just prints the money and on paper it's private financial institutions doing the lending. Same difference.)

Daho0n 6y ago
If you look at Denmark's way (GP's example) then it is nothing like the loans you mention. The government decides how the loans are put together and buyers can pick between them. None of them are like the ones from the crash.
- pdonis 6y ago
  > None of them are like the ones from the crash. I dunno, negative central bank rates sounds a lot like the financial insanity that caused the crash to me. I guess we'll just have to see how it plays out.

darkteflon 6y ago

Fellow Australian, agree 100%. I’ve watched housing policy transform the fabric of Australian life over my lifetime, in ways that are unequivocally bad.

Ericson2314 6y ago

Everyone should have housing in a decent location, but making this about ownership is silly. Land is a finite public good. Period. Denser buildings that no-one should entirely own are usually better. Taking a step back, flows are good, stocks are bad, unless there is a "real" capital investment at stake. Ownership, a single payment (ignoring morages) for indefinite rights, is a very weird financial instrument (note the contrast between "forever" and "single" transfer). It's funny fiction that just complicates the math. Rents, a flow, are actually good. The problem is not rents but rentierism, i.e. when rents flow to owners (to stock) regardless of productive investment. The solution is to move away from equity to debt base financing: The constructors of the home are paid a fixed profit (fixed interest) and nothing more (bounded stock), buildings are coops (no ownership distinct from residency) and rents continuously replenish the maintainence pool after the construction debt is paid (flows all the way down!). Again, speculation on finite land post construction investment recoupment is a cancer that has no place in the public sphere. People who like "actually existing capitalism" are being severely uncreative with the math.