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Seriously. 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 t

Seriously. 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 4y ago
This 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 4y ago
CA 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 4y 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 ?

iso1631 4y ago

This 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 4y ago

CA 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 4y 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 ?