3 ms·

When rates are lower, more people can "afford" to buy a house because the repayments are lower. Lower rates also (all thing being equal) means lower rents.

lotsofpulp 4y ago
What does lower interest rates have to do with lower rents? Taxpayer subsidized interest rates simply transfer future taxpayer money to existing land owners, similar to how taxpayer subsidized educations loans transfer money from future taxpayers to educational institutions and their staff, via excessive tuition prices. If the government wanted to help someone buy a house, it could do one or more of the following: 1) build more houses 2) pay someone to build more houses 3) give people cash so that they can buy houses. Houses can be abodes of any kind, including apartment, condo, townhouse, detached house, etc.
- JenrHywy 4y ago
  > What does lower interest rates have to do with lower rents? Interest rates affect repayments. Higher repayments mean that the rent an owner is willing to accept will be higher (or, they won't enter the market). Your whole model seems a little strange to me. Keeping rates low/stable is not a housing subsidy; it's about keeping the entire economy growing at a sustainable rate.
  - lotsofpulp 4y ago
    Keeping rates artificially low/stable is a subsidy, to keep asset prices growing at a rate that matches people’s expectations so there is not any political unrest when people’s 401k and pension and house price does not end up where they think it should. My model is about helping people acquire a home they can live in. Which means having a home available for them to live in, and giving them cash to obtain it. Using taxpayer funded loans is wholly unnecessary to accomplish that, and is a wealth transfer from non land owners to land owners in the long run.
qudat 4y ago
Why not simply provide a subsidy directly to that subgroup that can now afford houses because of lower interest rates instead of providing massive benefits to those who can already afford? Not to mention second homes, etc. We are subsidizing the well-off to allow some subgroup to afford owning homes while excluding the poorest from getting any benefits.
- JenrHywy 4y ago
  Interest rate control is not a subsidy.

lotsofpulp 4y ago

What does lower interest rates have to do with lower rents? Taxpayer subsidized interest rates simply transfer future taxpayer money to existing land owners, similar to how taxpayer subsidized educations loans transfer money from future taxpayers to educational institutions and their staff, via excessive tuition prices. If the government wanted to help someone buy a house, it could do one or more of the following: 1) build more houses 2) pay someone to build more houses 3) give people cash so that they can buy houses. Houses can be abodes of any kind, including apartment, condo, townhouse, detached house, etc.

JenrHywy 4y ago
> What does lower interest rates have to do with lower rents? Interest rates affect repayments. Higher repayments mean that the rent an owner is willing to accept will be higher (or, they won't enter the market). Your whole model seems a little strange to me. Keeping rates low/stable is not a housing subsidy; it's about keeping the entire economy growing at a sustainable rate.
- lotsofpulp 4y ago
  Keeping rates artificially low/stable is a subsidy, to keep asset prices growing at a rate that matches people’s expectations so there is not any political unrest when people’s 401k and pension and house price does not end up where they think it should. My model is about helping people acquire a home they can live in. Which means having a home available for them to live in, and giving them cash to obtain it. Using taxpayer funded loans is wholly unnecessary to accomplish that, and is a wealth transfer from non land owners to land owners in the long run.

qudat 4y ago

Why not simply provide a subsidy directly to that subgroup that can now afford houses because of lower interest rates instead of providing massive benefits to those who can already afford? Not to mention second homes, etc. We are subsidizing the well-off to allow some subgroup to afford owning homes while excluding the poorest from getting any benefits.

JenrHywy 4y ago
Interest rate control is not a subsidy.