4 ms·

It'd be great if it were possible to buy a house and not have it be an "investment"

by rcpt 4y ago

socialismisok 4y ago
Yes, 1000 times yes. The idea that housing is an investment (or that you can invest in housing you'll never use) distorts so many systems in America. We stop thinking about housing as something everyone needs and start thinking about making sure we get ours before others do.
- TulliusCicero 4y ago
  Exactly. Imagine if the supply of new cars dropped through the floor and prices shot up, especially for used cars. Oh wait, this actually happened during the pandemic and nobody was like, "oh this is good, people's car equity is going up!" because with things that aren't houses people have a saner view of finances.
  - quonn 4y ago
    I know a lot of people who started to think of their cars as appreciating assets.
    - TulliusCicero 4y ago
      Now imagine people start trying to ban car companies from making new cars, because they'll probably just be luxury cars for brogrammers anyway, plus more cars means less parking availability!
    - saltcured 4y ago
      Hah, so this becomes the same trap as thinking that way about a primary home. Do they have a plan for selling to realize their gains? Do we get to look forward to car-equity lines of credit or reverse car loans where people try to have their cake and eat it?
- Simon_O_Rourke 4y ago
  I'd be interested to see more of what the likes of Singapore do, especially for larger metropolitan areas. As I understand it, and I could be way wrong here, but I think there's a government office that buys and sells properties, but with restrictions on price and who can buy through the schema. Anyone else is totally free to conduct private property transactions, but get slapped with an almost-unmanageable property tax, making it more economical to go through official channels. This then lets the government rather than the market set the fair rate for a particular house in a particular area. https://darrenong.sg/blog/a-complete-guide-to-buy-a-property-in-singapore/ https://darrenong.sg/blog/a-complete-guide-to-buy-a-property...
  - herodoturtle 4y ago
    You might also be interested in checking out Sweden’s public housing policies. They vary slightly from one municipality to the next, but an interesting concept overall.
    - mijamo 4y ago
      Sweden Public housing is terrible. You get in the queue at 16/18 and maybe maybe when you're 30 you can get a nice 2 rooms apartment on the suburbs. Except if you managed to either buy someone's contract illegally, or use family connections to get in front of the queue. If you are a recent immigrant there is basically no point going in the queue and you will be forced to expensive second hand contract and move every year as they expire. And then there's no logic to prices. You will get something cheaper in your 50s because you waited so long that you can finally get a nice spacious apartment for no money at all in the city center, while a student will have to pay more than that to get a shitty corridor room in the suburbs. Real life example: a friend paying 6000kr for a room in the suburbs as a student vs a 40yo lady with a good income paying the same for a 2 bedroom appartment in the center (market rent for second hand contracts for such a flat is about 19 000kr). And then you have newly built public housing in the suburbs that has prices 2-3 times more expensive than the old ones in the center for the same size, but those you can get without waiting whereas the old ones need more than 20 years of queue to get. It is probably the most broken system in Sweden, but it kind of seems to be by design to be honest. I would actually have liked a well functioning and supplied public housing market, compared to the annoying parts of the private market in most countries, but swedish rules have just made it a nightmare instead
beembeem 4y ago
This was an explicit goal of housing policy in the US 100 years ago. Read any text from that time period and you will see that housing was viewed as an investment and the foundation of wealth. Policy was therefore supportive of this view. It's time we revisited this now that the country looks very different. - For one, there is a large trend towards urbanization which changes the makeup of the country. - The 30 year fixed-rate mortgage and mortgage interest deduction (now capped, and less impactful given higher standard deduction amounts) have been a large contributor to housing values being distorted from normal market prices. - Throw in low interest rates, widespread speculation, financialization of real estate (ABNB, loanmls.com, etc) you end up with a human right being divvied up by institutions, speculators, and an aging wealthy populace that has no interest in sharing the pie.
- alvah 4y ago
  “The 30 year fixed-rate mortgage and mortgage interest deduction (now capped, and less impactful given higher standard deduction amounts) have been a large contributor to housing values being distorted from normal market prices.” I’m not sure how much of a factor that is - here in Australia our house price : household income ratio is, if anything, even more deranged than it is in the US, and 30 year fixed rates are unheard-of here - maybe 2 year fixed rates at certain times, but usually most mortgages are variable (and usually at higher rates than in the US).
- dagw 4y ago
  The 30 year fixed-rate mortgage and mortgage interest deduction...have been a large contributor to housing values being distorted from normal market prices. That should be easy to test. Hardly any other country has 30 year fixed rate mortgages and lots of countries have far lower mortgage interest deduction. Would be interesting to measure the distortions in those countries and compare to the US.
  - jleyank 4y ago
    Canada has no mortgage interest deduction and feels it has a real problem with vacant/investment housing (particularly in Toronto or Vancouver). Given that it’s adjacent to the us this should give you useful data. But I think a big problem is that more housing would result in lower house values which would bother the crap out of oldies and conservatives.

It'd be great if it were possible to buy a house and not have it be an "investment"

by rcpt 4y ago

It'd be great if it were possible to buy a house and not have it be an "investment"

Yes, 1000 times yes. The idea that housing is an investment (or that you can invest in housing you'll never use) distorts so many systems in America. We stop thinking about housing as something everyone needs and start thinking about making sure we get ours before others do.

TulliusCicero 4y ago
Exactly. Imagine if the supply of new cars dropped through the floor and prices shot up, especially for used cars. Oh wait, this actually happened during the pandemic and nobody was like, "oh this is good, people's car equity is going up!" because with things that aren't houses people have a saner view of finances.
- quonn 4y ago
  I know a lot of people who started to think of their cars as appreciating assets.
  - TulliusCicero 4y ago
    Now imagine people start trying to ban car companies from making new cars, because they'll probably just be luxury cars for brogrammers anyway, plus more cars means less parking availability!
  - saltcured 4y ago
    Hah, so this becomes the same trap as thinking that way about a primary home. Do they have a plan for selling to realize their gains? Do we get to look forward to car-equity lines of credit or reverse car loans where people try to have their cake and eat it?
Simon_O_Rourke 4y ago
I'd be interested to see more of what the likes of Singapore do, especially for larger metropolitan areas. As I understand it, and I could be way wrong here, but I think there's a government office that buys and sells properties, but with restrictions on price and who can buy through the schema. Anyone else is totally free to conduct private property transactions, but get slapped with an almost-unmanageable property tax, making it more economical to go through official channels. This then lets the government rather than the market set the fair rate for a particular house in a particular area. https://darrenong.sg/blog/a-complete-guide-to-buy-a-property-in-singapore/ https://darrenong.sg/blog/a-complete-guide-to-buy-a-property...
- herodoturtle 4y ago
  You might also be interested in checking out Sweden’s public housing policies. They vary slightly from one municipality to the next, but an interesting concept overall.
  - mijamo 4y ago
    Sweden Public housing is terrible. You get in the queue at 16/18 and maybe maybe when you're 30 you can get a nice 2 rooms apartment on the suburbs. Except if you managed to either buy someone's contract illegally, or use family connections to get in front of the queue. If you are a recent immigrant there is basically no point going in the queue and you will be forced to expensive second hand contract and move every year as they expire. And then there's no logic to prices. You will get something cheaper in your 50s because you waited so long that you can finally get a nice spacious apartment for no money at all in the city center, while a student will have to pay more than that to get a shitty corridor room in the suburbs. Real life example: a friend paying 6000kr for a room in the suburbs as a student vs a 40yo lady with a good income paying the same for a 2 bedroom appartment in the center (market rent for second hand contracts for such a flat is about 19 000kr). And then you have newly built public housing in the suburbs that has prices 2-3 times more expensive than the old ones in the center for the same size, but those you can get without waiting whereas the old ones need more than 20 years of queue to get. It is probably the most broken system in Sweden, but it kind of seems to be by design to be honest. I would actually have liked a well functioning and supplied public housing market, compared to the annoying parts of the private market in most countries, but swedish rules have just made it a nightmare instead

beembeem 4y ago

This was an explicit goal of housing policy in the US 100 years ago. Read any text from that time period and you will see that housing was viewed as an investment and the foundation of wealth. Policy was therefore supportive of this view. It's time we revisited this now that the country looks very different. - For one, there is a large trend towards urbanization which changes the makeup of the country. - The 30 year fixed-rate mortgage and mortgage interest deduction (now capped, and less impactful given higher standard deduction amounts) have been a large contributor to housing values being distorted from normal market prices. - Throw in low interest rates, widespread speculation, financialization of real estate (ABNB, loanmls.com, etc) you end up with a human right being divvied up by institutions, speculators, and an aging wealthy populace that has no interest in sharing the pie.

alvah 4y ago
“The 30 year fixed-rate mortgage and mortgage interest deduction (now capped, and less impactful given higher standard deduction amounts) have been a large contributor to housing values being distorted from normal market prices.” I’m not sure how much of a factor that is - here in Australia our house price : household income ratio is, if anything, even more deranged than it is in the US, and 30 year fixed rates are unheard-of here - maybe 2 year fixed rates at certain times, but usually most mortgages are variable (and usually at higher rates than in the US).
dagw 4y ago
The 30 year fixed-rate mortgage and mortgage interest deduction...have been a large contributor to housing values being distorted from normal market prices. That should be easy to test. Hardly any other country has 30 year fixed rate mortgages and lots of countries have far lower mortgage interest deduction. Would be interesting to measure the distortions in those countries and compare to the US.
- jleyank 4y ago
  Canada has no mortgage interest deduction and feels it has a real problem with vacant/investment housing (particularly in Toronto or Vancouver). Given that it’s adjacent to the us this should give you useful data. But I think a big problem is that more housing would result in lower house values which would bother the crap out of oldies and conservatives.