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Housing is at the root of many of the rich world’s problems (2020) | 379 points | 6 days ago | 794 comments | https://news.ycombinator.com/item?id=32493549 http

Housing is at the root of many of the rich world’s problems (2020) | 379 points | 6 days ago | 794 comments | https://news.ycombinator.com/item?id=32493549 https://news.ycombinator.com/item?id=32493549 On this post I wrote: > A couple ideas for how to fix some real estate problems: > 1. A zoning rule that requires home owners to live in the owned home. ... And the general response? > The mega reit buying residential properties is also overblown. 70% of rental properties are owned by individual investors. > None of this would have much impact. > This would reduce the housing stock.

crisdux 4y ago
The high rate of rentals owned by individual investors is bad too if our goal is to maximize the number of home owners. I know a lot of people in my cohort who bought and moved into a new home, but kept their previous home as a rental. IMO this option is only accessible to large amount of people during this unique time because of government policy, ultra low interests rates, and societal trends. I think a large part of it is a government incentivized system that rewards incumbents in a disproportional manner. I think this disparity is contributing to overall feelings of resentment and will contribute to social issues and political turmoil.
- buscoquadnary 4y ago
  It will be interesting to see how that plays out now that interest rates are rising. Honestly it feels a lot like 08 all over again. Somebody decided to go and get another home as an investment property, they leveraged themselves but took advantage of the low interest rates and a 20 year mortgage, it was a smart idea at the time, prices kept going up, they could just keep bumping rent because where would anyone else go, everywhere was getting more expensive. Interest rates go up, there are problems with people affording the rent, suddenly their unit is sitting vacant for a month, or two, or three. They drop prices to increase interest, it isn't enough. Suddenly they need to flip the house, but because interest rates have gone up demand has gone down, everyone who was getting on the rental property gravy train suddenly isn't so interested when they're paying 8% instead of 2%, so the house is underwater. The bank forecloses and sells the property for cheap they don't want houses they want money, this means demand for other houses that are now overpriced becomes even lower, the dominoes keep falling. Suddenly tons of people that looked to the RE gravy train find themselves in over their head for taking out debts that seemed like a good idea at the time.
  - foogazi 4y ago
    > Interest rates go up, there are problems with people affording the rent, suddenly their unit is sitting vacant for a month, Hopefully they got a fixed rate mortgage that way their payment never goes up OTOH everyone argues that there’s not enough housing and now here you say that homes will actually be vacant for months- which is it ?
danem 4y ago
These are just bandaid solutions that do little to solve the underlaying problem and well established fact that we simply haven't been building enough homes over the last 50 years. Proposals that don't address this, or remove capital from the market should be met with skepticism imo.

crisdux 4y ago

The high rate of rentals owned by individual investors is bad too if our goal is to maximize the number of home owners. I know a lot of people in my cohort who bought and moved into a new home, but kept their previous home as a rental. IMO this option is only accessible to large amount of people during this unique time because of government policy, ultra low interests rates, and societal trends. I think a large part of it is a government incentivized system that rewards incumbents in a disproportional manner. I think this disparity is contributing to overall feelings of resentment and will contribute to social issues and political turmoil.

buscoquadnary 4y ago
It will be interesting to see how that plays out now that interest rates are rising. Honestly it feels a lot like 08 all over again. Somebody decided to go and get another home as an investment property, they leveraged themselves but took advantage of the low interest rates and a 20 year mortgage, it was a smart idea at the time, prices kept going up, they could just keep bumping rent because where would anyone else go, everywhere was getting more expensive. Interest rates go up, there are problems with people affording the rent, suddenly their unit is sitting vacant for a month, or two, or three. They drop prices to increase interest, it isn't enough. Suddenly they need to flip the house, but because interest rates have gone up demand has gone down, everyone who was getting on the rental property gravy train suddenly isn't so interested when they're paying 8% instead of 2%, so the house is underwater. The bank forecloses and sells the property for cheap they don't want houses they want money, this means demand for other houses that are now overpriced becomes even lower, the dominoes keep falling. Suddenly tons of people that looked to the RE gravy train find themselves in over their head for taking out debts that seemed like a good idea at the time.
- foogazi 4y ago
  > Interest rates go up, there are problems with people affording the rent, suddenly their unit is sitting vacant for a month, Hopefully they got a fixed rate mortgage that way their payment never goes up OTOH everyone argues that there’s not enough housing and now here you say that homes will actually be vacant for months- which is it ?

danem 4y ago

These are just bandaid solutions that do little to solve the underlaying problem and well established fact that we simply haven't been building enough homes over the last 50 years. Proposals that don't address this, or remove capital from the market should be met with skepticism imo.