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> The current attitude toward housing is based on the recent explosion of house prices which is driven by financialization, extremely low interest rates, and de
by qeternity 4y ago
> The current attitude toward housing is based on the recent explosion of house prices which is driven by financialization, extremely low interest rates, and demand outpacing supply where there are jobs.
These are the mechanisms by which the housing market has been driven to absurdity. But that reason why were here is that politicians and by extension the electorate on whose behalf they govern, decided to turn housing into a retirement plan. We then created enormous government programs to encourage people to partake in this scheme, which only robbed the future to pay the present. And now that many families have substantial wealth tied up in housing, it will be nearly impossible to voluntarily undo this mess.
- nwatson 4y agoAnd a big swath of the US population were barred from participating in those programs and so didn't get the benefit of relative inflation.
- BrianOnHN 4y agoWhat programs?
- m0llusk 4y agoFederal Housing Administration backed loans and the mortgage interest tax deduction worked together to give a big boost to a very specific demographic slice of the population.
- pibechorro 4y agoThis is why we aught to never have subcidies or bailouts.
- ceejayoz 4y agoPerhaps, but at this point that means pulling the rope ladder up behind you so no one else can use it.
- LBJsPNS 4y agoNo. There is no perfect system. That doesn't mean you don't implement systems. You just police them better to make sure that kind of problem doesn't happen any more.
- sneak 4y agoHard to find problems with a system that doesn't exist, so perhaps some "systems" are perfect.
- drewcoo 4y agoSystems, like functional code, can seem perfect in isolation. Everything is accounted for and it's provable. Beautiful! Applied to any useful purpose, though, there are externalities and there is the unexpected. If you include those externalities in your model, you not only have a more complicated model, but you probably have an even larger surface of externalities.
- nwatson 4y agoPlus explicit contracts in new housing developments barring current sales and future sales to specific "undesirable" demographics. This "red-lining" was widespread from post-WW2 boom through the 80s or so to keep those demographics out of some areas. Those demographics were locked out of the housing markets and in big urban areas like NYC this created an artificial demand for rental that forced these people to pay above-market rental rates for substandard housing, a double-slam on generational wealth accumulation.