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Renting Is Terrible. Owning Is Worse

21 points by jseliger 6y ago

deleted 6y ago
[deleted]
diogenescynic 6y ago
Given that home prices have risen faster than other assets, does the traditional math of owning vs renting still play out? Is it still cheaper to own vs rent over say a 30 year period? I often wonder if you just put that money in the stock market where you don't have maintenance costs, property taxes or other costs associated with owning a home--and you're more flexible to move. Any charts that compare the long term investment of a home to stocks?
- UncleOxidant 6y ago
  You've gotta live somewhere. If I was renting I'd be paying about 2X what I'm paying for the mortgage on the house I bought 11 years ago. That would cut how much I could invest in other areas like stocks. I don't see it as an either/or situation - you can own and you can invest.
  - diogenescynic 6y ago
    But what about property taxes and maintenance costs? Yes, you may pay less comparing just the mortgage payment to rental payment but there are other costs. I just don't know that it's as straight forward as it used to be unless you live close to good jobs and never plan to move.
    - UncleOxidant 6y ago
      I'm including property taxes in that number. Sure, maintenance isn't included in that number - I figure about $200 to $300 / month for that. In another 2 years my mortgage will be paid off and then I can even up that maintenance number to include some potential remodeling.
twobitshifter 6y ago
I bought my house with plans to rent half of it out. I plan to charge reasonable below market rates, based on my costs. Owning a house (to live in) without some rental income is not a smart investment as it’s usually considered. The price of housing goes up, which seems good for home owners, right? Well it’s better than for renters, but it’s still a terrible deal. Housing is a necessity or essential good. If you sell your house, even in a sellers market like today, you will immediately become a buyer in a seller’s market, facing the same inflated costs to get back into a house. You can’t go without housing, whatever it costs is what you will pay. What situations is this not the case? If you downsize or move to a place with lower housing costs or somehow fundamentally change your living arrangement to lower the cost. If you die, houses can be a good inheritance, but people usually want their investments to provide something during their lifetimes. If you find a house that is undervalued and can be improved and sold for much more. However, this exists in any investment decision and is not unique to housing. Most houses won’t fall into this category or they would have already been bought and sold. If you can fully pay off the mortgage, you’ll immediately get more monthly income and this income can be applied towards actual investments that make you money. (But you could have done this instead of paying off the mortgage too, so it’s economy dependent)
- d1zzy 6y ago
  > If you sell your house, even in a sellers market like today, you will immediately become a buyer in a seller’s market, facing the same inflated costs to get back into a house. Whether it's a seller's market, buyer's market or balanced market, as both a seller and buyer _in the same market_ you will experience things from both sides, I don't think the market situation really matters in that case. But what does matter, especially in market of constantly increasing prices, is that already owning a house means your stake in the house is already following the general market pricing so you only need to pay some extra "if you move up" in the market or you cash in some money "if you downsize". This is vastly better than just being a first time buyer, in that type of market. > If you can fully pay off the mortgage, you’ll immediately get more monthly income and this income can be applied towards actual investments that make you money. (But you could have done this instead of paying off the mortgage too, so it’s economy dependent) Really depends on the mortgage interest rate, term (years that the interest is applied over) and the expected returns from those said investments. In other words, I find it hard to find enough motivation to pay off a 2% interest rate 10 years long mortgage loan. 2% is same as inflation, that mortgage is almost free.
UncleOxidant 6y ago
They say that the reason owning is terrible is because it's not as flexible as renting - you can't easily move to where work is. But I'm not sure that's as big of a problem in a covid/post covid world where WFH has become common. Also, I don't think that a society that is rootless is all that great of an outcome - people who own are more invested in their communities and will be more likely to get involved in improving them. I'm glad I bought 11 years ago. My house is easily worth 2X what I paid then. If I'd been renting all this time I'd be paying at least 2X in rent compared to what my mortgage is. And I'd be subject to the whims of owners who decide to sell and make the renters move.
- paxys 6y ago
  It's way too early to draw any conclusions about the "post covid" world considering we aren't in it yet. My personal opinion is that it is going to be a lot closer to the pre covid world than people think. > If I'd been renting all this time I'd be paying at least 2X in rent compared to what my mortgage is This is generally not the case. Rents on a property take a long time to catch up to the mortgage payment. Of course market conditions vary by location, but I suspect if a lot of homeowners ran the numbers (total mortgage + interest, closing costs, taxes and property maintenance compared to incremental annual rent, difference invested in S&P 500 or something riskier), the conclusion would be different.
  - t0mbstone 6y ago
    Yeah... I'm renting a two bedroom apartment in the middle of a nice area for $1200 a month (with rent costs split with my partner). All utilities (water, trash, electricity) are included in that cost, and they have a full time staff that maintains the grounds. This means I'm living in a nice area for only $600 a month. If I wanted to live in a home in the same area, that $600 wouldn't even cover the interest on the mortgage, much less all the other costs that come with living in a home. In the mean time, I have been saving thousands of dollars every month and investing it. Over the past couple of years, I managed to completely pay off over $50,000 worth of debt and also saved up around $140,000 (most of which is invested in stock market index funds). If I want to move to another state to pursue other job opportunities, I can do that whenever I want at the drop of the hat. All it would cost me to terminate my lease early is two month's worth of rent. So yeah... pros and cons. I'm still not convinced that buying a house is worth it over renting.
peterpeppers 6y ago
Is there any organization currently working on this idea in the US? I'm not fully understanding the concept and would like to know more about public ownership for renters in practice.
- dredmorbius 6y ago
  UCLA's Russell Lewis Centre is the organisation making the proposal. There are some co-housing and community-housing projects, as well as NYC's venerated housing co-ops (for better and worse). There are some community / sustainable housing initiatives in Davis and Chico California, that I'm aware of (I'd need to research on specifics), though I'm not sure they follow this model specifically. There's the prospect that occurs to me of working with land banks (mostly practiced in the Midwest / East Coast in the US) as a way of acquiring land. The proposal itself seems striking to me. Yours is the only comment that's actually cottened on to the main thrust of the article.
jjk166 6y ago
Renting is many things, but it sure isn't flexible. If I get a new job while there are still 5 months left on my lease, I either need to eat a pretty hefty cost to get a second apartment now or take my chances that I'll be able to find a good apartment later (in addition to suffering the long commute for months). It might take a little time and effort for a sale to go through but at least I can choose when to start the process, and the fees don't need to be paid out of pocket when I move. And with buying a home, what you see is what you get, whereas with renting there is a huge unknown in the landlord/management that incentivizes you to stick with the devil you know. On top of this, the value of flexibility is itself questionable - maybe you'll get a new job in 5 months, maybe you'll be there 5 years; owning carries the risk you may have to sell at a sub-optimal time and take a loss, but renting is guaranteed to burn the money. In my opinion, renting makes more sense in situations like fixed term work contracts where you don't have flexibility.
- jeppesen-io 6y ago
  Doesn't this fail to take account of the sellers fees to the listing agent? At least in the u.s
  - jjk166 6y ago
    You typically pay that after you sell with money from the sale. Yes if your home value hasn't increased by a few percent since you purchased it you will suffer a net loss, but you'll never be in a position where you can't afford the loss.
justrudd 6y ago
I love the flexibility of my house - paint a wall, hang my tv, run speaker wire to my surrounds by going up in my attic, have a squat rack in my garage, etc. But after replacing my 30 year old roof, 10 year old water heater, and 20 year old furnace all in the same month? Yeah. Owning isn’t always great. But on the bright side, unless an emergency happens, I’ve got many years to recoup those costs. Just hurts writing out that many checks all in one go.
- maxerickson 6y ago
  In most markets major repairs factor into the value of the property. In some sense you restore the house to where it was before years of use.
- gher-shyu3i 6y ago
  Can't you deduct all those costs from taxable income?
  - TYPE_FASTER 6y ago
    Home improvements on your primary residence are not tax deductible, but do contribute to the basis price used to calculate profit (and tax) when you sell: https://www.nolo.com/legal-encyclopedia/what-home-improvements-tax-deductible.html https://www.nolo.com/legal-encyclopedia/what-home-improvemen...
maliker 6y ago
I did the math on rent vs. buy in the city of Washington DC and it was basically the same cost, so I went with renting for the ease and increased flexibility. Seems like the article is suggesting a mechanism for forced savings (i.e. part of the rent check is invested in the public housing corporation instead of in whatever the tenant wants). Seems like a bad deal for a savvy investor, but might encourage some people to save. God help the renters if the public housing corporation loses money or goes out of business though. I saw an article recently on HN about how Vienna handles rent control and public housing [0]. Seemed like a better approach--just have the city government work to make sure that rents are affordable. [0] https://thetyee.ca/Solutions/2018/06/06/Vienna-Housing-Affordability-Case-Cracked/ https://thetyee.ca/Solutions/2018/06/06/Vienna-Housing-Affor...
nicbou 6y ago
I have moved away from the city centre, cutting my rent from 950€ to 550€ per month for the same apartment size. I am toying with the idea of moving somewhere else, either temporarily (to see Asia), or permanently (to be closer to mountains). Later, I might want a bigger, nicer apartment, or something in a quieter area. My friend just bought an apartment, and it's a stressful, expensive affair. In Germany, you should expect 12% of the purchase price in various taxes and fees. You still have to pay monthly expenses, which are still 10-20% of your "rent". That's on top of maintenance, which if I recall is around 2% of the value of the building, ever year. There's a chance she might get slapped with random repairs, something that's never on my mind. Owning a house seems even worse. Selling her house felt like a weight off my mom's shoulders. She spent so much time and energy keeping that house. I was looking at around the same time, and I really struggled to trace the cost of renting vs buying over time, and to find where the lines intersect. It makes it a very dubious investment for me. --- Side note: I have noticed that many articles from American magazines phrase everything in terms of race, gender and political affiliation, something I rarely see in local publications. This article is a good example. Does it add anything meaningful to the article?
- throwaway8581 6y ago
  I've always felt that buying an apartment is a dubious proposition. I don't like the idea of being vulnerable to the whims of the building management and the other unit owners. I would only ever buy a standalone house. As to your side note: No, it adds nothing. It's just paying homage to the new national religion of wokeism.
  - andrepd 6y ago
    I'm sure much of it is scoring woke points, but in the USA there has been historically (and still today) discrimination in housing with regards to race, some of it even institutionalised.
- flyingfences 6y ago
  > Does it add anything meaningful to the article? At times, in certain cases, it can serve to "align" the article relative to readers' expectations and beliefs. When the article is promoting a controversial position, it can help to show readers that "people like them" agree with it. In most cases, though, it's more likely included as a sort of "Carthago delenda est" to beat the drum for the author's preferred cultural crusade.
underseacables 6y ago
I will take some financial certainty over flexibility any day. My mortgage is the same every month, year after year, and with that general certainty it’s one less thing I have to worry about going crazy on me.
taylodl 6y ago
Let's see. My house I bought 12 years ago is now worth double what I paid for it - but I didn't pay full price because the house I sold prior cleared me enough to pay for nearly half of this house in one go. Now I live in a 2,400 sq ft midcentury ranch for a price that's less than people are now paying for a 2 BR apartment in my area. Yeah. Owning sucks! People talk about the flexibility of renting. I don't get it. You have to sign a 12 month lease. On average then you're 6 months away from being able to get out of your lease. In my area you can sell a house within 90 days and it's been that way for over 40 years! Of course now houses are on the market for 10 days and people are bidding them up - that's not normal, but still I can sell a house faster than I can get out of a lease. Don't even get me started on the difference owning vs. renting makes on your retirement planning! I live in a high tax area and my taxes are HALF of the rent of a 2 BR townhome! Renting makes no sense.
- BugsJustFindMe 6y ago
  > My house I bought 12 years ago is now worth double what I paid for it This is not as strong of a financial case as one might think. AAPL stock I bought less than 2 years ago is now worth more than double what I paid for it. If you don't want to have to pick a winner, the Nasdaq composite doubled in the past 2 years, and if you feel like the Nasdaq is too risky because of 2000 then the SP500 doubled in the past 5. All of the money that you spent up front on that house could have been invested elsewhere instead with better returns.
  - hellisothers 6y ago
    True but you buy a house with leverage. So if you put 20% down and the house doubles in value your return is 500%, on top of being able to deduct your taxes and most of your monthly payment (as interest), and when you sell (after 2 years) you don’t pay taxes on $250k of the proceeds ($500k per couple).
    - dragonwriter 6y ago
      > True but you buy a house with leverage. You can buy stock with leverage, too. OTOH, buying a house with leverage, at least in a non-recourse state, exposes you to less downside risk.
patwolf 6y ago
> The foundation of the program would be quite simple: public ownership of housing, acquired or built with government loans—though run by local for-profit or nonprofit property managers—and rented at market price. I'm not an economist, but "market price" in this context does not seem very sensible. If I have the choice of paying the same rent for traditional housing versus housing that I can build equity in, I would end up wanting the equity. So really that should be worth more and command a higher price. If instead they're going to fix the price of public rents so that you're not paying a premium for it, then it's not really market price and will lead to a lot of the same issues that rent control does.
Slimbo 6y ago
Is publicly owned housing or housing associations not a thing in the US? Quite common elsewhere in the west.
- paxys 6y ago
  It is, but is (1) extremely mismanaged and (2) only available to very low income families.
juancn 6y ago
WTF? Moving is super stressful. I'd rather own and know that I'll move only when I want rather than be on the whim of price changes in the rent or the owner not wanting to renew the contract.
hytdstd 6y ago
I always liked NY Times' Rent Vs Buy Calculator: https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html https://www.nytimes.com/interactive/2014/upshot/buy-rent-cal...
throwaway0a5e 6y ago
Screw the money. I'm just happy to have stability and not have a landlord telling me what I can and can't do.
paxys 6y ago
While I agree that homes are generally too expensive (whether owning or renting), aiming to get rid of mass private property ownership is a bit too extreme.
zwieback 6y ago
The way I look at it the first (and only) house we bought 25 yrs ago was not a great investment in terms of dollar returns but we love living there and tweaked it to be just how we want it. At this point we just pay the relatively low taxes. Now we've accumulated enough wealth that we bought a condo outright, if you're in that incredibly privileged position owning is fantastic. We use it for fun but it's also a good way to generate a steady income stream. So it's not "owning vs renting" it's whether you can afford enough of a downpayment.
scelerat 6y ago
Owning isn't worse with rent and real estate increases are as dramatic as what has happened in the SF bay area over the last ten years. I was very lucky to buy towards the end of the dip in 2013 and my mortgage on a 2-bedroom 2-bath house with a yard is now significantly less than what I would have be renting it for now.
Bancakes 6y ago
You will own nothing and be happy. You will live in a cave and eat the bugs.
dredmorbius 6y ago
It's quite disappointing that very nearly the entire discussion here misses the key proposal of the article: A public-ownership rental option might solve this problem, at least in part. The foundation of the program would be quite simple: public ownership of housing, acquired or built with government loans—though run by local for-profit or nonprofit property managers—and rented at market prices. No saving for a down payment (or being given one by family) and no qualifying for a mortgage. The only requirements for participation in the public-ownership option would be (1) move in, and (2) pay rent. Though admittedly, the lede is well-buried nine 'graphs in, and the clickbait title has succeeded in self-sabotaging this particular discussion. The idea and organisational structure behind it strike me as potentially interesting and a notable shift in addressing what I'm seeing as a Big Problem. Not mentioned in the article is the concept of land banks, instituted in some countries, and parts of the US, though not within California where the Russel Lewis Centre is located (UCLA). Contributing tax-lien and abandoned properties to such a public ownership rental proposal would be tremendously useful. There is a book, with presumably more information: The Affordable City: Strategies for Putting Housing Within Reach. https://www.bibliovault.org/BV.book.epl?ISBN=9781642831337 https://www.bibliovault.org/BV.book.epl?ISBN=9781642831337 Somewhat inexplicably, the article fails to mention this.
- dang 6y ago
  This is a case study in how thoroughly a thread is dominated by its initial conditions, and how the title is the most important of those.
  - dredmorbius 6y ago
    Agreed. Thanks for helping re-rail the train.

21 points by jseliger 6y ago

deleted 6y ago

[deleted]

Given that home prices have risen faster than other assets, does the traditional math of owning vs renting still play out? Is it still cheaper to own vs rent over say a 30 year period? I often wonder if you just put that money in the stock market where you don't have maintenance costs, property taxes or other costs associated with owning a home--and you're more flexible to move. Any charts that compare the long term investment of a home to stocks?

UncleOxidant 6y ago
You've gotta live somewhere. If I was renting I'd be paying about 2X what I'm paying for the mortgage on the house I bought 11 years ago. That would cut how much I could invest in other areas like stocks. I don't see it as an either/or situation - you can own and you can invest.
- diogenescynic 6y ago
  But what about property taxes and maintenance costs? Yes, you may pay less comparing just the mortgage payment to rental payment but there are other costs. I just don't know that it's as straight forward as it used to be unless you live close to good jobs and never plan to move.
  - UncleOxidant 6y ago
    I'm including property taxes in that number. Sure, maintenance isn't included in that number - I figure about $200 to $300 / month for that. In another 2 years my mortgage will be paid off and then I can even up that maintenance number to include some potential remodeling.

twobitshifter 6y ago

I bought my house with plans to rent half of it out. I plan to charge reasonable below market rates, based on my costs. Owning a house (to live in) without some rental income is not a smart investment as it’s usually considered. The price of housing goes up, which seems good for home owners, right? Well it’s better than for renters, but it’s still a terrible deal. Housing is a necessity or essential good. If you sell your house, even in a sellers market like today, you will immediately become a buyer in a seller’s market, facing the same inflated costs to get back into a house. You can’t go without housing, whatever it costs is what you will pay. What situations is this not the case? If you downsize or move to a place with lower housing costs or somehow fundamentally change your living arrangement to lower the cost. If you die, houses can be a good inheritance, but people usually want their investments to provide something during their lifetimes. If you find a house that is undervalued and can be improved and sold for much more. However, this exists in any investment decision and is not unique to housing. Most houses won’t fall into this category or they would have already been bought and sold. If you can fully pay off the mortgage, you’ll immediately get more monthly income and this income can be applied towards actual investments that make you money. (But you could have done this instead of paying off the mortgage too, so it’s economy dependent)

d1zzy 6y ago
> If you sell your house, even in a sellers market like today, you will immediately become a buyer in a seller’s market, facing the same inflated costs to get back into a house. Whether it's a seller's market, buyer's market or balanced market, as both a seller and buyer _in the same market_ you will experience things from both sides, I don't think the market situation really matters in that case. But what does matter, especially in market of constantly increasing prices, is that already owning a house means your stake in the house is already following the general market pricing so you only need to pay some extra "if you move up" in the market or you cash in some money "if you downsize". This is vastly better than just being a first time buyer, in that type of market. > If you can fully pay off the mortgage, you’ll immediately get more monthly income and this income can be applied towards actual investments that make you money. (But you could have done this instead of paying off the mortgage too, so it’s economy dependent) Really depends on the mortgage interest rate, term (years that the interest is applied over) and the expected returns from those said investments. In other words, I find it hard to find enough motivation to pay off a 2% interest rate 10 years long mortgage loan. 2% is same as inflation, that mortgage is almost free.

UncleOxidant 6y ago

They say that the reason owning is terrible is because it's not as flexible as renting - you can't easily move to where work is. But I'm not sure that's as big of a problem in a covid/post covid world where WFH has become common. Also, I don't think that a society that is rootless is all that great of an outcome - people who own are more invested in their communities and will be more likely to get involved in improving them. I'm glad I bought 11 years ago. My house is easily worth 2X what I paid then. If I'd been renting all this time I'd be paying at least 2X in rent compared to what my mortgage is. And I'd be subject to the whims of owners who decide to sell and make the renters move.

paxys 6y ago
It's way too early to draw any conclusions about the "post covid" world considering we aren't in it yet. My personal opinion is that it is going to be a lot closer to the pre covid world than people think. > If I'd been renting all this time I'd be paying at least 2X in rent compared to what my mortgage is This is generally not the case. Rents on a property take a long time to catch up to the mortgage payment. Of course market conditions vary by location, but I suspect if a lot of homeowners ran the numbers (total mortgage + interest, closing costs, taxes and property maintenance compared to incremental annual rent, difference invested in S&P 500 or something riskier), the conclusion would be different.
- t0mbstone 6y ago
  Yeah... I'm renting a two bedroom apartment in the middle of a nice area for $1200 a month (with rent costs split with my partner). All utilities (water, trash, electricity) are included in that cost, and they have a full time staff that maintains the grounds. This means I'm living in a nice area for only $600 a month. If I wanted to live in a home in the same area, that $600 wouldn't even cover the interest on the mortgage, much less all the other costs that come with living in a home. In the mean time, I have been saving thousands of dollars every month and investing it. Over the past couple of years, I managed to completely pay off over $50,000 worth of debt and also saved up around $140,000 (most of which is invested in stock market index funds). If I want to move to another state to pursue other job opportunities, I can do that whenever I want at the drop of the hat. All it would cost me to terminate my lease early is two month's worth of rent. So yeah... pros and cons. I'm still not convinced that buying a house is worth it over renting.

peterpeppers 6y ago

Is there any organization currently working on this idea in the US? I'm not fully understanding the concept and would like to know more about public ownership for renters in practice.

dredmorbius 6y ago
UCLA's Russell Lewis Centre is the organisation making the proposal. There are some co-housing and community-housing projects, as well as NYC's venerated housing co-ops (for better and worse). There are some community / sustainable housing initiatives in Davis and Chico California, that I'm aware of (I'd need to research on specifics), though I'm not sure they follow this model specifically. There's the prospect that occurs to me of working with land banks (mostly practiced in the Midwest / East Coast in the US) as a way of acquiring land. The proposal itself seems striking to me. Yours is the only comment that's actually cottened on to the main thrust of the article.

jjk166 6y ago

Renting is many things, but it sure isn't flexible. If I get a new job while there are still 5 months left on my lease, I either need to eat a pretty hefty cost to get a second apartment now or take my chances that I'll be able to find a good apartment later (in addition to suffering the long commute for months). It might take a little time and effort for a sale to go through but at least I can choose when to start the process, and the fees don't need to be paid out of pocket when I move. And with buying a home, what you see is what you get, whereas with renting there is a huge unknown in the landlord/management that incentivizes you to stick with the devil you know. On top of this, the value of flexibility is itself questionable - maybe you'll get a new job in 5 months, maybe you'll be there 5 years; owning carries the risk you may have to sell at a sub-optimal time and take a loss, but renting is guaranteed to burn the money. In my opinion, renting makes more sense in situations like fixed term work contracts where you don't have flexibility.

jeppesen-io 6y ago
Doesn't this fail to take account of the sellers fees to the listing agent? At least in the u.s
- jjk166 6y ago
  You typically pay that after you sell with money from the sale. Yes if your home value hasn't increased by a few percent since you purchased it you will suffer a net loss, but you'll never be in a position where you can't afford the loss.

justrudd 6y ago

I love the flexibility of my house - paint a wall, hang my tv, run speaker wire to my surrounds by going up in my attic, have a squat rack in my garage, etc. But after replacing my 30 year old roof, 10 year old water heater, and 20 year old furnace all in the same month? Yeah. Owning isn’t always great. But on the bright side, unless an emergency happens, I’ve got many years to recoup those costs. Just hurts writing out that many checks all in one go.

maxerickson 6y ago
In most markets major repairs factor into the value of the property. In some sense you restore the house to where it was before years of use.
gher-shyu3i 6y ago
Can't you deduct all those costs from taxable income?
- TYPE_FASTER 6y ago
  Home improvements on your primary residence are not tax deductible, but do contribute to the basis price used to calculate profit (and tax) when you sell: https://www.nolo.com/legal-encyclopedia/what-home-improvements-tax-deductible.html https://www.nolo.com/legal-encyclopedia/what-home-improvemen...

maliker 6y ago

I did the math on rent vs. buy in the city of Washington DC and it was basically the same cost, so I went with renting for the ease and increased flexibility. Seems like the article is suggesting a mechanism for forced savings (i.e. part of the rent check is invested in the public housing corporation instead of in whatever the tenant wants). Seems like a bad deal for a savvy investor, but might encourage some people to save. God help the renters if the public housing corporation loses money or goes out of business though. I saw an article recently on HN about how Vienna handles rent control and public housing [0]. Seemed like a better approach--just have the city government work to make sure that rents are affordable. [0] https://thetyee.ca/Solutions/2018/06/06/Vienna-Housing-Affordability-Case-Cracked/ https://thetyee.ca/Solutions/2018/06/06/Vienna-Housing-Affor...

nicbou 6y ago

I have moved away from the city centre, cutting my rent from 950€ to 550€ per month for the same apartment size. I am toying with the idea of moving somewhere else, either temporarily (to see Asia), or permanently (to be closer to mountains). Later, I might want a bigger, nicer apartment, or something in a quieter area. My friend just bought an apartment, and it's a stressful, expensive affair. In Germany, you should expect 12% of the purchase price in various taxes and fees. You still have to pay monthly expenses, which are still 10-20% of your "rent". That's on top of maintenance, which if I recall is around 2% of the value of the building, ever year. There's a chance she might get slapped with random repairs, something that's never on my mind. Owning a house seems even worse. Selling her house felt like a weight off my mom's shoulders. She spent so much time and energy keeping that house. I was looking at around the same time, and I really struggled to trace the cost of renting vs buying over time, and to find where the lines intersect. It makes it a very dubious investment for me. --- Side note: I have noticed that many articles from American magazines phrase everything in terms of race, gender and political affiliation, something I rarely see in local publications. This article is a good example. Does it add anything meaningful to the article?

throwaway8581 6y ago
I've always felt that buying an apartment is a dubious proposition. I don't like the idea of being vulnerable to the whims of the building management and the other unit owners. I would only ever buy a standalone house. As to your side note: No, it adds nothing. It's just paying homage to the new national religion of wokeism.
- andrepd 6y ago
  I'm sure much of it is scoring woke points, but in the USA there has been historically (and still today) discrimination in housing with regards to race, some of it even institutionalised.
flyingfences 6y ago
> Does it add anything meaningful to the article? At times, in certain cases, it can serve to "align" the article relative to readers' expectations and beliefs. When the article is promoting a controversial position, it can help to show readers that "people like them" agree with it. In most cases, though, it's more likely included as a sort of "Carthago delenda est" to beat the drum for the author's preferred cultural crusade.

underseacables 6y ago

I will take some financial certainty over flexibility any day. My mortgage is the same every month, year after year, and with that general certainty it’s one less thing I have to worry about going crazy on me.

taylodl 6y ago

Let's see. My house I bought 12 years ago is now worth double what I paid for it - but I didn't pay full price because the house I sold prior cleared me enough to pay for nearly half of this house in one go. Now I live in a 2,400 sq ft midcentury ranch for a price that's less than people are now paying for a 2 BR apartment in my area. Yeah. Owning sucks! People talk about the flexibility of renting. I don't get it. You have to sign a 12 month lease. On average then you're 6 months away from being able to get out of your lease. In my area you can sell a house within 90 days and it's been that way for over 40 years! Of course now houses are on the market for 10 days and people are bidding them up - that's not normal, but still I can sell a house faster than I can get out of a lease. Don't even get me started on the difference owning vs. renting makes on your retirement planning! I live in a high tax area and my taxes are HALF of the rent of a 2 BR townhome! Renting makes no sense.

BugsJustFindMe 6y ago
> My house I bought 12 years ago is now worth double what I paid for it This is not as strong of a financial case as one might think. AAPL stock I bought less than 2 years ago is now worth more than double what I paid for it. If you don't want to have to pick a winner, the Nasdaq composite doubled in the past 2 years, and if you feel like the Nasdaq is too risky because of 2000 then the SP500 doubled in the past 5. All of the money that you spent up front on that house could have been invested elsewhere instead with better returns.
- hellisothers 6y ago
  True but you buy a house with leverage. So if you put 20% down and the house doubles in value your return is 500%, on top of being able to deduct your taxes and most of your monthly payment (as interest), and when you sell (after 2 years) you don’t pay taxes on $250k of the proceeds ($500k per couple).
  - dragonwriter 6y ago
    > True but you buy a house with leverage. You can buy stock with leverage, too. OTOH, buying a house with leverage, at least in a non-recourse state, exposes you to less downside risk.

patwolf 6y ago

> The foundation of the program would be quite simple: public ownership of housing, acquired or built with government loans—though run by local for-profit or nonprofit property managers—and rented at market price. I'm not an economist, but "market price" in this context does not seem very sensible. If I have the choice of paying the same rent for traditional housing versus housing that I can build equity in, I would end up wanting the equity. So really that should be worth more and command a higher price. If instead they're going to fix the price of public rents so that you're not paying a premium for it, then it's not really market price and will lead to a lot of the same issues that rent control does.

Slimbo 6y ago

Is publicly owned housing or housing associations not a thing in the US? Quite common elsewhere in the west.

paxys 6y ago
It is, but is (1) extremely mismanaged and (2) only available to very low income families.

juancn 6y ago

WTF? Moving is super stressful. I'd rather own and know that I'll move only when I want rather than be on the whim of price changes in the rent or the owner not wanting to renew the contract.

hytdstd 6y ago

I always liked NY Times' Rent Vs Buy Calculator: https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html https://www.nytimes.com/interactive/2014/upshot/buy-rent-cal...

throwaway0a5e 6y ago

Screw the money. I'm just happy to have stability and not have a landlord telling me what I can and can't do.

paxys 6y ago

While I agree that homes are generally too expensive (whether owning or renting), aiming to get rid of mass private property ownership is a bit too extreme.

zwieback 6y ago

The way I look at it the first (and only) house we bought 25 yrs ago was not a great investment in terms of dollar returns but we love living there and tweaked it to be just how we want it. At this point we just pay the relatively low taxes. Now we've accumulated enough wealth that we bought a condo outright, if you're in that incredibly privileged position owning is fantastic. We use it for fun but it's also a good way to generate a steady income stream. So it's not "owning vs renting" it's whether you can afford enough of a downpayment.

scelerat 6y ago

Owning isn't worse with rent and real estate increases are as dramatic as what has happened in the SF bay area over the last ten years. I was very lucky to buy towards the end of the dip in 2013 and my mortgage on a 2-bedroom 2-bath house with a yard is now significantly less than what I would have be renting it for now.

Bancakes 6y ago

You will own nothing and be happy. You will live in a cave and eat the bugs.

dredmorbius 6y ago

It's quite disappointing that very nearly the entire discussion here misses the key proposal of the article: A public-ownership rental option might solve this problem, at least in part. The foundation of the program would be quite simple: public ownership of housing, acquired or built with government loans—though run by local for-profit or nonprofit property managers—and rented at market prices. No saving for a down payment (or being given one by family) and no qualifying for a mortgage. The only requirements for participation in the public-ownership option would be (1) move in, and (2) pay rent. Though admittedly, the lede is well-buried nine 'graphs in, and the clickbait title has succeeded in self-sabotaging this particular discussion. The idea and organisational structure behind it strike me as potentially interesting and a notable shift in addressing what I'm seeing as a Big Problem. Not mentioned in the article is the concept of land banks, instituted in some countries, and parts of the US, though not within California where the Russel Lewis Centre is located (UCLA). Contributing tax-lien and abandoned properties to such a public ownership rental proposal would be tremendously useful. There is a book, with presumably more information: The Affordable City: Strategies for Putting Housing Within Reach. https://www.bibliovault.org/BV.book.epl?ISBN=9781642831337 https://www.bibliovault.org/BV.book.epl?ISBN=9781642831337 Somewhat inexplicably, the article fails to mention this.

dang 6y ago
This is a case study in how thoroughly a thread is dominated by its initial conditions, and how the title is the most important of those.
- dredmorbius 6y ago
  Agreed. Thanks for helping re-rail the train.