4 ms·

What governmental policies make housing an investment? Are there countries with policies that effectively make it a depreciating asset? What do those policies l

What governmental policies make housing an investment? Are there countries with policies that effectively make it a depreciating asset? What do those policies look like?

loeg 5y ago
> What governmental policies make housing an investment? Local government (US): Low-density zoning, burdensome review processes on new development, "historical building" preservation, minimum amenity regulations (e.g., parking spaces, "set back"), etc. Federal government (US): Subsidizing the cost of 30-year mortgages for lenders; subsidizing mortgage interest for homebuyers (mortgage interest deduction) at the expense of all other taxpayers (e.g., renters). > Are there countries with policies that effectively make it a depreciating asset? What do those policies look like? I can't speak to the specifics of what other countries do, but many of the obvious steps are to just stop the bleeding that we already know about, mentioned above. Eliminating the federal mortgage interest deduction, removing local government authority to impose arbitrarily burdensome processes on new development, upzoning, deregulating (no minimum parking, reduced minimum setback), etc.
- jjav 5y ago
  > subsidizing mortgage interest for homebuyers (mortgage interest deduction) at the expense of all other taxpayers (e.g., renters) If the mortgage interest deduction disappeared tomorrow, the landlord's cost to own that house would go up, and every penny of that increase would have to be passed on to the renter. So while it's true a renter doesn't have that tax deduction, eliminating it isn't going to lower any rents, only raise them.
  - loeg 5y ago
    Eliminating the deduction would lower a renter's taxes, and money is fungible.
    - jjav 5y ago
      I don't follow how it would lower the renter's taxes?
fulafel 5y ago
Allowing investors to build/buy housing units and rent them out is a clear one that enables investment. Depreciation wouldn't make it a bad (or non-) investment, as long as returns are good over the unit lifetime. That's the default assumption for non urban housing where land is abundant.

What governmental policies make housing an investment? Are there countries with policies that effectively make it a depreciating asset? What do those policies look like?

loeg 5y ago

> What governmental policies make housing an investment? Local government (US): Low-density zoning, burdensome review processes on new development, "historical building" preservation, minimum amenity regulations (e.g., parking spaces, "set back"), etc. Federal government (US): Subsidizing the cost of 30-year mortgages for lenders; subsidizing mortgage interest for homebuyers (mortgage interest deduction) at the expense of all other taxpayers (e.g., renters). > Are there countries with policies that effectively make it a depreciating asset? What do those policies look like? I can't speak to the specifics of what other countries do, but many of the obvious steps are to just stop the bleeding that we already know about, mentioned above. Eliminating the federal mortgage interest deduction, removing local government authority to impose arbitrarily burdensome processes on new development, upzoning, deregulating (no minimum parking, reduced minimum setback), etc.

jjav 5y ago
> subsidizing mortgage interest for homebuyers (mortgage interest deduction) at the expense of all other taxpayers (e.g., renters) If the mortgage interest deduction disappeared tomorrow, the landlord's cost to own that house would go up, and every penny of that increase would have to be passed on to the renter. So while it's true a renter doesn't have that tax deduction, eliminating it isn't going to lower any rents, only raise them.
- loeg 5y ago
  Eliminating the deduction would lower a renter's taxes, and money is fungible.
  - jjav 5y ago
    I don't follow how it would lower the renter's taxes?

fulafel 5y ago

Allowing investors to build/buy housing units and rent them out is a clear one that enables investment. Depreciation wouldn't make it a bad (or non-) investment, as long as returns are good over the unit lifetime. That's the default assumption for non urban housing where land is abundant.