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Housing Breaks People's Brains (2022)

• api 4y ago
  As soon as someone signs a mortgage, the whole incentive structure flips. When you are looking to buy then affordability is in your interest, but as soon as you do you effectively join a cartel that benefits from restricting supply. There aren’t that many other things with a market dynamic this perverse. It’s a horrible system. There are measures that can limit how bad it can get like zoning reform but I can’t think of a way to fundamentally fix the whole incentive structure. Maybe taxing real estate capital gains more?
  • kqr2 4y ago
    Perhaps property tax can help align incentives. In theory, the more neighbors that you have, your tax burden to maintain infrastructure should go down due to economies of scale. Consequently you would welcome more neighbors if it helped keep your taxes low. In places like California with Prop 13, however, there is a perverse incentive since your tax actually doesn't even increase as fast as inflation.