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Housing can either be affordable for most people or it can be a safe, lucrative investment. It will never be both, but the people who expect the latter vote and

Housing can either be affordable for most people or it can be a safe, lucrative investment. It will never be both, but the people who expect the latter vote and vigorously involve themselves in the legislative process. Eventually the landed gentry will have to be brought to heel, but they’re not going down without a fight.

twblalock 4y ago
> Housing can either be affordable for most people or it can be a safe, lucrative investment. For most of the period since WWII housing was both affordable and a good investment. We have no "landed gentry." Stop sharpening your guillotine and deal with reality. People who can afford housing are not guilty of anything -- we should celebrate success, rather than meet it with envy and veiled threats.
- jackstraw14 4y ago
  > We have no "landed gentry." It's just a bit less immediately tangible than it used to be. It's still there, and the market still ebbs and flows.
  - twblalock 4y ago
    One of the things about "landed gentry", in the countries where they actually exist, is that they inherited their land. In America almost all of the homes sold today are purchased with money from income, rather than being inherited. Almost all of the people who are buying homes today can afford them by themselves, based on their income. They aren't "landed gentry", they are just successful people. To demean them by implying they don't deserve their success is insulting and wrong. That is very different than being angry that the Compte du Whatevertheheck inherited a chateau from his parents. And it requires a different response than fulminating about how the "landed gentry will have to be brought to heel" which is total nonsense.
    - Arkhaine_kupo 4y ago
      > Almost all of the people who are buying homes today can afford them by themselves, based on their income. They aren't "landed gentry", they are just successful people. Almost 30% of all houses sold last year on Texas was to LCC and institutional investors. You can keep the myth going of people without help buying their house and being succesful but the reality is most people report having help from friends or family for the deposit, that most mortgages are sold with criminal variable interest rates and that the corp mass buying of houses has been growing year after year since 2016. https://localprofile.com/2022/06/07/investors-bought-texas-homes-in-2021/ https://localprofile.com/2022/06/07/investors-bought-texas-h...
      - twblalock 4y ago
        Only ~9% of mortgages in the US are variable-rate mortgages, and variable rates are not criminal. People love to blame corporations and "foreign investors" for bidding up the price of housing. Canada has banned that in various ways multiple times in the past few years and it has had no noticeable impact on the price of housing. It turns out that institutional and "foreign" investors, just like anyone else who has their heads screwed on straight, don't overpay -- the price of housing is what it is no matter who the buyer is.
        Arkhaine_kupo 4y ago
        > Only ~9% of mortgages in the US are variable-rate mortgages At the start sure. But if you have a 2 year fixed rate and then it switches to variable, then you have a variable mortagege for 90% of your 20 year mortgage. > People love to blame corporations and "foreign investors" for bidding up the price of housing. They 100% play a significant role on the problem. > Canada has banned that in various ways multiple times in the past few years and it has had no noticeable impact on the price of housing. Not in any way that fundamentally changes the status quo, certainly not to reverse it, and also housing has been in a downspiral of accesibility for 70 years, 3 local laws in Canada is not gonna fix it. > just like anyone else who has their heads screwed on straight, don't overpay Housing is a need, overpaying or homelessness is a real junction for a sizeble part of the population. Look at singapore, they are more capitalist than the US and has banned private landlords. Their results speak for themselves, cheaper mortgages, more space per person, shorter commutes, possibilities for larger families to find enough space. If you prefer to have a building "for billionaries" empty like New York does instead of close to 0% homelessness then thats your choice, but do not pretend it is to help hard working people be rewarded for their labour. Landlords are a remenant of aristocracy, a way for rich tophs to keep living large from their estate. Adam Smith called them parasites for a reason, they are a negative GDP engine.
- siquick 4y ago
  Australian resident here. Why should I be celebrating my landlord (who bought this house outright in 1995 for $86,000AUD) putting up our rent by $210 (24%) per week just because he can? My partner and I are both pretty decent earners but because of the amount of money we have to pay in rent (for a not even that great place) we will never be able to own a house in the city my partner was born in because we simply can’t save enough for a deposit in a period of time where the house prices wont rise out of reach. Greed-driven housing policy is ruining communities for a lot of people. All but a small handful of politicians in Australia own multiple investment properties. It is in their interest for the current system to continue as is.
  - sien 4y ago
    Sydney or Melbourne?
  - twblalock 4y ago
    You should be glad that the property rights that let your landlord do that are the same property rights that let you do what you want with your own money, including becoming a landlord yourself if you choose to do so. You should be glad that success is not punished, because if that was the case, nobody would try to succeed and your society would suffer tremendously as a result -- and when the economy suffers it always hurts the poor more than it hurts the rich. By renting you are getting a place to live, you are benefitting from the success of others who were able to afford housing, and you are buying time for yourself be successful. It's how healthy markets work.
    - siquick 4y ago
      Lucky me for having a roof over my families head in the 12th largest economy in the world. Our definitions of success are obviously very different.
      - twblalock 4y ago
        Do you realize how funny that is coming from twelfth place?
- ben_w 4y ago
  I'm a landlord now, and I've been of a similar opinion to @mullingitover both before and since, though perhaps with less colourful language. My rent has normally been just following the advice of my agent, in turn following market trends. But the most recent update from them was recommending a rent increase, which I rejected because of the news from the UK containing many references to a cost of living crisis. (The property is in the UK, if that wasn't clear). "Following the market" isn't a crime, but the market is not kind or generous. The phrase "without a fight" can be legal or physical; the former is a foregone conclusion, the latter would be undesirable.
- coldtea 4y ago
  >We have no "landed gentry." You'd be surprised. Large land ownership is a huge deal regarding money, status, and influence, without even going into readings of the situation like Georgism.
- crote 4y ago
  Yes, and that's why housing is unaffordable these days. An investment which increases its value at the rate of inflation or worse is a pretty poor investment. After all, you could probably make more money by simply buying government bonds. If the housing price increases more than the rate of inflation, it will eventually become unaffordable. After all, salary increases at the rate of inflation - if the housing price increased faster it'd take up an ever-increasing portion of your salary, meaning it'd become less affordable. Housing was affordable, but its price increased in such a way that it is now unaffordable. This made it a great investment for the people who already owned housing, but newer generations no longer have access to housing and can't invest in it.
  - twblalock 4y ago
    > After all, salary increases at the rate of inflation That's quite an assumption there. Specifically, it assumes no increases in per-worker productivity. By your logic, housing never would have been affordable. But we know that it was! > This made it a great investment for the people who already owned housing, but newer generations no longer have access to housing and can't invest in it. Actually about 43% of new homebuyers are millennials, and that could not happen if new generations could not afford housing. https://www.nar.realtor/newsroom/nar-report-shows-share-of-millennial-home-buyers-continues-to-rise https://www.nar.realtor/newsroom/nar-report-shows-share-of-m...
  - EVa5I7bHFq9mnYK 4y ago
    Newer generations will inherit all that real estate. Some will inherit more, some less, just as some will be born in Australia and some in Malaysia, well, life is unfair.
- deleted 4y ago
  [deleted]
nly 4y ago
Can you explain why it can't be both? If I owned a property outright, and rented it out at market rates at a decent yield, is it not both? The problem is property exists in a debt market. Mortgage pricing basically determines property prices.
- nateberkopec 4y ago
  If you buy a residential property only to rent it out, it is not housing for you, it is solely an investment.
  - twblalock 4y ago
    It's also housing for the people who live in it. Imagine a world without landlords. It's way worse than the one we live in now. It's a world where you cannot rent, you can only choose between buying or being homeless. Landlords provide housing and most of them don't make a ton of money out of it. They hope for future appreciation of the property, which they can only realize if they sell, and their monthly income often doesn't cover the cost of ownership.
    - DaiPlusPlus 4y ago
      How would you consider public/council/local-authority housing then? They certainly don’t own the property as an investment - especially as oftentimes thise properties cannot legally be sold anyway.
      - twblalock 4y ago
        That just means the government is your landlord.
    - flangola7 4y ago
      There could be options beyond rent buy or be homeless. But a number of steps would be required, such as growing up and taking the boot out of our throat.
    - 4y ago
alwayslikethis 4y ago
For a developed country where housing is not a safe, lucrative investment, look at modern-day Japan. The zoning codes are loose, allowing you to build far more housing, and the urban infrastructure makes much more efficient use of space (without nearly as much parking, for instance), which enhances the availability of housing. This, combined with the overall declining population, means that houses are viewed as a depreciating asset, much like cars. While the land may still grow in value due to various development occurring, it is not nearly to the same extent.
- midoridensha 4y ago
  The declining population has nothing to do with houses being viewed as a depreciating asset: it was like that long before the population started declining. Houses were (are) simply seen as disposable, having an expected service life, just like a car. After the service life is over, it's demolished and something new built in its place, since the land retains value (and may gain value, depending on local demand). Why anyone would value an older building over a new one, I have no idea, as it's entirely irrational, unless the building has real historic value. The things that make housing affordable here are the zoning codes and laws which basically prevent neighbors from restricting development. Lack of stupid laws dictating how development must be done help a lot too: things like setbacks, parking requirements, etc.
  - rippercushions 4y ago
    Properly built older buildings can be much better quality than shoddy new ones. For example, in Australia, many older buildings were double brick (two layers), which is sturdier and insulates better, but virtually all new brick buildings are brick veneer, meaning a single layer on a wooden or steel frame. Of course, there's significant survivor bias here, because there were plenty of shoddy older buildings that have been torn down.
    - midoridensha 4y ago
      In Japan, older buildings are much poorer quality than new ones. They don't survive earthquakes well, they have no insulation in the walls, they're really quite horrible. Building standards are constantly rising, so newer units are almost always better than older ones. Brick buildings don't exist in Japan. Any such structure would quickly collapse in an earthquake. Any older buildings that still exist were either exceptionally well-built for the time, and/or were retrofitted to meet modern earthquake standards. So some historic buildings are still around because they're valuable for cultural or historic reasons, but this doesn't include housing built in the last century.
everdrive 4y ago
I’ve never voted to make my house a more lucrative investment, and I’m not even aware of which laws support this. Can anyone provide some examples?
mihaic 4y ago
I once spent a whole afternoon thinking about how one could make a political campaign with the explicit goals of dropping the value of real-estate. It's a tough one, breaking against most economic dogmas: foreigners and second home owners would be severely limited to stop them from abusing the system, while existing mortgages would need to be taken as a shared loss between the banks and the homeowners. The alternative seems to be a broken society, and sadly that might be more probable.

twblalock 4y ago

> Housing can either be affordable for most people or it can be a safe, lucrative investment. For most of the period since WWII housing was both affordable and a good investment. We have no "landed gentry." Stop sharpening your guillotine and deal with reality. People who can afford housing are not guilty of anything -- we should celebrate success, rather than meet it with envy and veiled threats.

jackstraw14 4y ago
> We have no "landed gentry." It's just a bit less immediately tangible than it used to be. It's still there, and the market still ebbs and flows.
- twblalock 4y ago
  One of the things about "landed gentry", in the countries where they actually exist, is that they inherited their land. In America almost all of the homes sold today are purchased with money from income, rather than being inherited. Almost all of the people who are buying homes today can afford them by themselves, based on their income. They aren't "landed gentry", they are just successful people. To demean them by implying they don't deserve their success is insulting and wrong. That is very different than being angry that the Compte du Whatevertheheck inherited a chateau from his parents. And it requires a different response than fulminating about how the "landed gentry will have to be brought to heel" which is total nonsense.
  - Arkhaine_kupo 4y ago
    > Almost all of the people who are buying homes today can afford them by themselves, based on their income. They aren't "landed gentry", they are just successful people. Almost 30% of all houses sold last year on Texas was to LCC and institutional investors. You can keep the myth going of people without help buying their house and being succesful but the reality is most people report having help from friends or family for the deposit, that most mortgages are sold with criminal variable interest rates and that the corp mass buying of houses has been growing year after year since 2016. https://localprofile.com/2022/06/07/investors-bought-texas-homes-in-2021/ https://localprofile.com/2022/06/07/investors-bought-texas-h...
    - twblalock 4y ago
      Only ~9% of mortgages in the US are variable-rate mortgages, and variable rates are not criminal. People love to blame corporations and "foreign investors" for bidding up the price of housing. Canada has banned that in various ways multiple times in the past few years and it has had no noticeable impact on the price of housing. It turns out that institutional and "foreign" investors, just like anyone else who has their heads screwed on straight, don't overpay -- the price of housing is what it is no matter who the buyer is.
      - Arkhaine_kupo 4y ago
        > Only ~9% of mortgages in the US are variable-rate mortgages At the start sure. But if you have a 2 year fixed rate and then it switches to variable, then you have a variable mortagege for 90% of your 20 year mortgage. > People love to blame corporations and "foreign investors" for bidding up the price of housing. They 100% play a significant role on the problem. > Canada has banned that in various ways multiple times in the past few years and it has had no noticeable impact on the price of housing. Not in any way that fundamentally changes the status quo, certainly not to reverse it, and also housing has been in a downspiral of accesibility for 70 years, 3 local laws in Canada is not gonna fix it. > just like anyone else who has their heads screwed on straight, don't overpay Housing is a need, overpaying or homelessness is a real junction for a sizeble part of the population. Look at singapore, they are more capitalist than the US and has banned private landlords. Their results speak for themselves, cheaper mortgages, more space per person, shorter commutes, possibilities for larger families to find enough space. If you prefer to have a building "for billionaries" empty like New York does instead of close to 0% homelessness then thats your choice, but do not pretend it is to help hard working people be rewarded for their labour. Landlords are a remenant of aristocracy, a way for rich tophs to keep living large from their estate. Adam Smith called them parasites for a reason, they are a negative GDP engine.
siquick 4y ago
Australian resident here. Why should I be celebrating my landlord (who bought this house outright in 1995 for $86,000AUD) putting up our rent by $210 (24%) per week just because he can? My partner and I are both pretty decent earners but because of the amount of money we have to pay in rent (for a not even that great place) we will never be able to own a house in the city my partner was born in because we simply can’t save enough for a deposit in a period of time where the house prices wont rise out of reach. Greed-driven housing policy is ruining communities for a lot of people. All but a small handful of politicians in Australia own multiple investment properties. It is in their interest for the current system to continue as is.
- sien 4y ago
  Sydney or Melbourne?
- twblalock 4y ago
  You should be glad that the property rights that let your landlord do that are the same property rights that let you do what you want with your own money, including becoming a landlord yourself if you choose to do so. You should be glad that success is not punished, because if that was the case, nobody would try to succeed and your society would suffer tremendously as a result -- and when the economy suffers it always hurts the poor more than it hurts the rich. By renting you are getting a place to live, you are benefitting from the success of others who were able to afford housing, and you are buying time for yourself be successful. It's how healthy markets work.
  - siquick 4y ago
    Lucky me for having a roof over my families head in the 12th largest economy in the world. Our definitions of success are obviously very different.
    - twblalock 4y ago
      Do you realize how funny that is coming from twelfth place?
ben_w 4y ago
I'm a landlord now, and I've been of a similar opinion to @mullingitover both before and since, though perhaps with less colourful language. My rent has normally been just following the advice of my agent, in turn following market trends. But the most recent update from them was recommending a rent increase, which I rejected because of the news from the UK containing many references to a cost of living crisis. (The property is in the UK, if that wasn't clear). "Following the market" isn't a crime, but the market is not kind or generous. The phrase "without a fight" can be legal or physical; the former is a foregone conclusion, the latter would be undesirable.
coldtea 4y ago
>We have no "landed gentry." You'd be surprised. Large land ownership is a huge deal regarding money, status, and influence, without even going into readings of the situation like Georgism.
crote 4y ago
Yes, and that's why housing is unaffordable these days. An investment which increases its value at the rate of inflation or worse is a pretty poor investment. After all, you could probably make more money by simply buying government bonds. If the housing price increases more than the rate of inflation, it will eventually become unaffordable. After all, salary increases at the rate of inflation - if the housing price increased faster it'd take up an ever-increasing portion of your salary, meaning it'd become less affordable. Housing was affordable, but its price increased in such a way that it is now unaffordable. This made it a great investment for the people who already owned housing, but newer generations no longer have access to housing and can't invest in it.
- twblalock 4y ago
  > After all, salary increases at the rate of inflation That's quite an assumption there. Specifically, it assumes no increases in per-worker productivity. By your logic, housing never would have been affordable. But we know that it was! > This made it a great investment for the people who already owned housing, but newer generations no longer have access to housing and can't invest in it. Actually about 43% of new homebuyers are millennials, and that could not happen if new generations could not afford housing. https://www.nar.realtor/newsroom/nar-report-shows-share-of-millennial-home-buyers-continues-to-rise https://www.nar.realtor/newsroom/nar-report-shows-share-of-m...
- EVa5I7bHFq9mnYK 4y ago
  Newer generations will inherit all that real estate. Some will inherit more, some less, just as some will be born in Australia and some in Malaysia, well, life is unfair.
deleted 4y ago
[deleted]

nly 4y ago

Can you explain why it can't be both? If I owned a property outright, and rented it out at market rates at a decent yield, is it not both? The problem is property exists in a debt market. Mortgage pricing basically determines property prices.

nateberkopec 4y ago
If you buy a residential property only to rent it out, it is not housing for you, it is solely an investment.
- twblalock 4y ago
  It's also housing for the people who live in it. Imagine a world without landlords. It's way worse than the one we live in now. It's a world where you cannot rent, you can only choose between buying or being homeless. Landlords provide housing and most of them don't make a ton of money out of it. They hope for future appreciation of the property, which they can only realize if they sell, and their monthly income often doesn't cover the cost of ownership.
  - DaiPlusPlus 4y ago
    How would you consider public/council/local-authority housing then? They certainly don’t own the property as an investment - especially as oftentimes thise properties cannot legally be sold anyway.
    - twblalock 4y ago
      That just means the government is your landlord.
  - flangola7 4y ago
    There could be options beyond rent buy or be homeless. But a number of steps would be required, such as growing up and taking the boot out of our throat.
  - 4y ago

alwayslikethis 4y ago

For a developed country where housing is not a safe, lucrative investment, look at modern-day Japan. The zoning codes are loose, allowing you to build far more housing, and the urban infrastructure makes much more efficient use of space (without nearly as much parking, for instance), which enhances the availability of housing. This, combined with the overall declining population, means that houses are viewed as a depreciating asset, much like cars. While the land may still grow in value due to various development occurring, it is not nearly to the same extent.

midoridensha 4y ago
The declining population has nothing to do with houses being viewed as a depreciating asset: it was like that long before the population started declining. Houses were (are) simply seen as disposable, having an expected service life, just like a car. After the service life is over, it's demolished and something new built in its place, since the land retains value (and may gain value, depending on local demand). Why anyone would value an older building over a new one, I have no idea, as it's entirely irrational, unless the building has real historic value. The things that make housing affordable here are the zoning codes and laws which basically prevent neighbors from restricting development. Lack of stupid laws dictating how development must be done help a lot too: things like setbacks, parking requirements, etc.
- rippercushions 4y ago
  Properly built older buildings can be much better quality than shoddy new ones. For example, in Australia, many older buildings were double brick (two layers), which is sturdier and insulates better, but virtually all new brick buildings are brick veneer, meaning a single layer on a wooden or steel frame. Of course, there's significant survivor bias here, because there were plenty of shoddy older buildings that have been torn down.
  - midoridensha 4y ago
    In Japan, older buildings are much poorer quality than new ones. They don't survive earthquakes well, they have no insulation in the walls, they're really quite horrible. Building standards are constantly rising, so newer units are almost always better than older ones. Brick buildings don't exist in Japan. Any such structure would quickly collapse in an earthquake. Any older buildings that still exist were either exceptionally well-built for the time, and/or were retrofitted to meet modern earthquake standards. So some historic buildings are still around because they're valuable for cultural or historic reasons, but this doesn't include housing built in the last century.

everdrive 4y ago

I’ve never voted to make my house a more lucrative investment, and I’m not even aware of which laws support this. Can anyone provide some examples?

mihaic 4y ago

I once spent a whole afternoon thinking about how one could make a political campaign with the explicit goals of dropping the value of real-estate. It's a tough one, breaking against most economic dogmas: foreigners and second home owners would be severely limited to stop them from abusing the system, while existing mortgages would need to be taken as a shared loss between the banks and the homeowners. The alternative seems to be a broken society, and sadly that might be more probable.