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Sounds like throwing gasoline into the fire. Housing prices are high because of supply and demand... so CA wants to use taxpayer money to increase demand?
by ng12 3y ago
Sounds like throwing gasoline into the fire. Housing prices are high because of supply and demand... so CA wants to use taxpayer money to increase demand?
- tasubotadas 3y agoAbsolute madness
- elcritch 3y agoThe best way to “defend” NIMBY-ism while feeling good you’re helping the poor and downtrodden.
- foogazi 3y agoOPM to “help” subsidize one class to buy from the other one
- theironhammer 3y agoAnd subsidize property speculators. The problem needs to be solved on the supply side not demand side.
- zbyte64 3y agoIt only applies to first time homebuyers. That's not fuel for property speculators.
- darth_avocado 3y agoThis is exactly what it is. If you can’t afford the down payment, how can you afford the mortgage?
- yamtaddle 3y agoSeriously. I'm a much bigger fan of government intervention in markets than, I think, most on this site, but this program just seems insane. "House prices are too high—let's raise demand rather than address supply!" LOLWUT? > "I thought the program was genius," said Scott Evans, executive vice president of Cross Country Mortgage, describing what he thought when he first heard about the new loan program. Mortgage dude likes having more clients. Shocking. > “When you sell the property or refinance the loan, they take up to 20% of the appreciation. The homeowner gets to keep 80%," he said. Wow. This gets even weirder. At least I guess this means they'll likely make money on the whole thing, but I'm not sure I love a state government being an outright investor in private homes.
- iso1631 3y agoThis is nothing new if you look outside the US. Help To Buy Equity Loan did this with new houses (the buyer technically had to provide 5%, but that was often given by the developer) 10 years ago, it's only just finished. The government part was 40% in London due to the insane prices there. https://en.wikipedia.org/wiki/Help_to_Buy https://en.wikipedia.org/wiki/Help_to_Buy The idea behind it is quite reasonable. People couldn't afford to save up for a deposit because all their money went in rent, which was higher than the cost of an equivalent mortgage + home maintenance. Certainly helped me break out of the earn->rent cycle.
- preston4tw 3y agoCA will make money if home prices increase from current highs due to supply constraints and if owners sell triggering the capture IIRC. CA now has a +$300m financial stake in that outcome. $300m is probably peanuts compared to the upside of addressing the CA housing crisis and enabling more CA GDP growth but it's also not nothing.
- foogazi 3y ago> CA will make money if home prices increase Wouldn’t CA also make money by allowing more housing to be built instead of playing finance shell games ?
- timcavel 3y ago[dead]
- HDThoreaun 3y agohttps://i.redd.it/4xb09cuixxqa1.jpg https://i.redd.it/4xb09cuixxqa1.jpg just subsidize demand!
- joe_the_user 3y agoThis after half the mortgages in the country are supported by the Federal Government. A fair portion of this is that things are so out-of-whack that no one has any plan but to keep the bubble going.
- TMWNN 3y agoSince increasing homeownership is a good thing, subsidizing homeownership is a good thing, amirite? Reminds me of Heinlein's Friday, in which the heroine visits a future California. The government, having found that those with college degrees earn more money, promptly issues every citizen a bachelor's degree to correct this inequitable situation.