7 ms·

Housing should have never been allowed to be an 'investment' in the first place. We've known that, but I think these chickens are finally coming home to roost.

mupuff1234 3y ago
I think for a good functioning economy we do want housing prices to generally go up, but in a much more modest and controlled way - so in that way it should be viewed as an appreciating asset. What it shouldn't be is a speculative investment for companies, non residents or wealthy individuals.
- Denvercoder9 3y ago
  Up with respect to what? They can't go up relative to wages forever without making housing unaffordable.
  - mupuff1234 3y ago
    Probably tied to local economical growth/wages. Which means it could still be relatively affordable for people who live in the area (minus income inequality issues) while also being a good investment compared to national average.
- Ekaros 3y ago
  Also maybe we need to ask if houses get better. Or bigger. And by how much. In good functioning economy, building a same house with same features and such should get cheaper as efficiency gets better. Materials should be at least cheaper. Ofc, we want bigger and more efficient housing with more features so that counteracts it, but how much should it counteract?
  - Falkon1313 3y ago
    Labor costs are a bigger percentage than materials. Those have been going down relative to efficiency for many years now, but there are limits to how much you can cut people's pay. Both relative to inflation and in absolute terms.
- qeternity 3y ago
  > I think for a good functioning economy we do want housing prices to generally go up In nominal terms it's inevitable. In real terms, this should not be the case. Housing is a commodity. It's the only commodity which has increased in price in real terms over time. This is because we've turned it into a retirement account.
  - quonn 3y ago
    How about this alternative explanation: Unlike a real commodity such as fruit, people compete for houses and look carefully. This is because houses are in different locations, generally unique, limited and perhaps most importantly because they are the largest expense most buyers will every have. Because there is competition a certain premium is paid. And if we assume further economical growth, the premium that an individual is capable of paying likewise should increase. Therefore, all things being equal, the prices should increase.
    - qeternity 3y ago
      A primary input to the pricing function of a commodity is location. This applies to fruit, and it changes nothing about housing. Source: career hedge fund commodities trader.
- qntmfred 3y ago
  it can go up as long as it goes up roughly in line with incomes, GDP, etc. basically, as long as the housing affordability index stays in the healthy zone. also, in Japan housing is a depreciating asset and while their economy has well known challenges over the last few decades, they're still an advanced economy that the majority of nations on Earth would probably be happy to trade places with. an outlier for sure, but worth mentioning
  - nemo44x 3y ago
    Japanese houses are built to last 20 years and be thrown away. Japanese houses are better compared to trailer homes in the USA in terms of lifespan and depreciation. Also they have a declining population.
- JasserInicide 3y ago
  Corporations of any type should just be banned from buying most domiciles. Should be a legal name on the deed. Will never happen though.
  - tekknik 3y ago
    A corporation is a legal entity capable of owning things
atyppo 3y ago
I'm 22. This has been talked about my entire life. Progress on this has been glacial, if there's been any at all. At some point, enough is going wrong with this country that there is going to be a mass of young and angry protestors that's never been seen before. The question of when it will happen hinges on when enough people can find enough interest and social cohesion to organize. For young people, this is not a political issue. It is an issue of inadequate and out of reach housing.
- deleted 3y ago
  [deleted]
- qntmfred 3y ago
  > enough is going wrong with this country that there is going to be a mass of young and angry protestors that's never been seen before says nearly every generation of ideal-minded and dissatisfied young people fwiw
  - xwdv 3y ago
    Aye, one of the thing I came to realize as I grew old enough to know people younger than me who were not teens or children, is that every generation overestimates how much they’re going to change the world and underestimates how many of their peers will change their views and become some version of the things they once opposed, just on different issues or contexts. Boomers were once a very liberal generation.
    - blacksmith_tb 3y ago
      Sure, "Don't trust anyone over 30!" (or 25, or...) is just a claim that the preceding generations are too invested (in both senses) in the status quo to consider sweeping changes. Of course, sometimes sweeping changes are for the worse, so that doesn't seem to me like best battle cry, really.
    - bcrosby95 3y ago
      Boomers were liberal for their time. But society gets more liberal over time so, in comparison, they are no longer liberal.
nemo44x 3y ago
Land is an investment. And land that is in places people want to be is an exceptionally good investment.
- jjoonathan 3y ago
  Competition for land could be structured as 30 year leases (give or take), rather than perpetual ownership. Then A. prices don't reflect an asset premium and B. the surplus accrues to the public, rather than to rich people.
  - nemo44x 3y ago
    30 year lease to who? Property rights and land ownership are the foundation this country is built on. You control this through property tax.
    - jjoonathan 3y ago
      Leases from the public to the person who wants the public to stay off a chunk of land. The perpetual ownership model is actually pretty weird: the public in 2023 agrees to stay off Bill Barnes' land in transferrable perpetuity in exchange for... a railroad built in 1850 that went defunct 100 years ago. And a dribble of property tax. Lol. Yes, the USA was founded by english nobility for english nobility. Is it really so surprising they upheld one of the most important institutions for ensuring that rich people can get paid for being rich? They also upheld slavery for similar reasons, though thankfully we sorted that one out 150 years ago.
      - nemo44x 3y ago
        Again, this is in effect what property tax does. You effectively lease the land from the government because the second you can’t or won’t pay your property tax they will take your land and sell it. Private ownership of land is actually in the governments best interest. Private individuals will improve land creating further tax. And buildings and people are the 2 things of value a government has. With private ownership the people are truly invested in the government and the government with the people.
ineedasername 3y ago
I’m not sure what you mean by allow. Rules and regulations preventing profits? Or outlawing financial instruments backed by mortgages? Owners have to prove all the money they’ve ever spent maintaining and improving the house w/ receipts and estimates in those costs after accounting for inflation, and only then selling it at a break even price? All apartment complexes operating at mandatory break even rates? I can tell you this: if I added up all home improvements, maintenance, and property taxes I’ve paid over 20 years then I’d take a significant loss when selling at current inflated values. Maybe when you look at the total cost of ownership for typical family owned homes then in many cases it’s not actually investment, maybe more like a savings account. That’s the best I’d get out of my home and I bought cheap w/ prices, inflated as they are, roughly 150% higher than my sticker price 20 years ago. The financial model for developers is of course different but if you’re going to look at home ownership as an investment for the owner then you can’t do that going from the buying price to selling price, you have add in all the costs of ownership. (Disclaimer: my TCO loss on my home despite rising prices would be do in large part because of truly massive property taxes.) I don’t see an easy way to outlaw the abilities for housing to be an investment. Even the it wouldn’t do anything at all to actually get people into housing, it would just make it more affordable for the lucky few who got to buy in at the reduced price. We just need to build more housing and have laws/regulations/rules in place that stop the NIMBY nonsense. No reasonable development can be denied if the increase in housing supply is lagging behind local increased population growth. Incentives to developers to build more than that minimum. Tax incentives for developers to keep prices within confines bands of local median incomes, tax penalties— a luxury tax— against selling a certain amount above these limits. And I don’t know, these may be really bad ideas too. But all I see disallowing investment accomplishing is to have housing inventory stagnate and make housing access partly a game of who you know to get an inside track— similar to how some affordable housing programs work right now. Around me, apartment complexes that are part of affordable housing programs have 2+ year waiting lists, some should be condemned and closed, but I’ve seen people pretty much walk into a recently opened space when they know someone who administers the program for that complex.
- rcarr 3y ago
  Here are some laws that partially curtail housing as investment: - ban anyone non-resident in the country from owning property - create an exponential property tax. 0% for first home, 2% for second home, 4% for third home, 8% for fourth home etc to discourage mass renting. - to make the point above easier to enforce, make it illegal for companies to own residential property other than a few exceptions such as developer companies holding newly built property that they’re selling, banks holding repossessions etc. All property must be owned by an individual citizen. - Mandate that developers build >50% affordable housing. Earmark this housing for first time buyers only. Non compliance means the developer is shut down and loses their license. - Mandate that developers build on their land or else have it seized by the government to avoid developers land banking and waiting it out for a change of administration which would reverse all the above rules so developers can go back to raking in absurd profits.

mupuff1234 3y ago

I think for a good functioning economy we do want housing prices to generally go up, but in a much more modest and controlled way - so in that way it should be viewed as an appreciating asset. What it shouldn't be is a speculative investment for companies, non residents or wealthy individuals.

Denvercoder9 3y ago
Up with respect to what? They can't go up relative to wages forever without making housing unaffordable.
- mupuff1234 3y ago
  Probably tied to local economical growth/wages. Which means it could still be relatively affordable for people who live in the area (minus income inequality issues) while also being a good investment compared to national average.
Ekaros 3y ago
Also maybe we need to ask if houses get better. Or bigger. And by how much. In good functioning economy, building a same house with same features and such should get cheaper as efficiency gets better. Materials should be at least cheaper. Ofc, we want bigger and more efficient housing with more features so that counteracts it, but how much should it counteract?
- Falkon1313 3y ago
  Labor costs are a bigger percentage than materials. Those have been going down relative to efficiency for many years now, but there are limits to how much you can cut people's pay. Both relative to inflation and in absolute terms.
qeternity 3y ago
> I think for a good functioning economy we do want housing prices to generally go up In nominal terms it's inevitable. In real terms, this should not be the case. Housing is a commodity. It's the only commodity which has increased in price in real terms over time. This is because we've turned it into a retirement account.
- quonn 3y ago
  How about this alternative explanation: Unlike a real commodity such as fruit, people compete for houses and look carefully. This is because houses are in different locations, generally unique, limited and perhaps most importantly because they are the largest expense most buyers will every have. Because there is competition a certain premium is paid. And if we assume further economical growth, the premium that an individual is capable of paying likewise should increase. Therefore, all things being equal, the prices should increase.
  - qeternity 3y ago
    A primary input to the pricing function of a commodity is location. This applies to fruit, and it changes nothing about housing. Source: career hedge fund commodities trader.
qntmfred 3y ago
it can go up as long as it goes up roughly in line with incomes, GDP, etc. basically, as long as the housing affordability index stays in the healthy zone. also, in Japan housing is a depreciating asset and while their economy has well known challenges over the last few decades, they're still an advanced economy that the majority of nations on Earth would probably be happy to trade places with. an outlier for sure, but worth mentioning
- nemo44x 3y ago
  Japanese houses are built to last 20 years and be thrown away. Japanese houses are better compared to trailer homes in the USA in terms of lifespan and depreciation. Also they have a declining population.
JasserInicide 3y ago
Corporations of any type should just be banned from buying most domiciles. Should be a legal name on the deed. Will never happen though.
- tekknik 3y ago
  A corporation is a legal entity capable of owning things

atyppo 3y ago

I'm 22. This has been talked about my entire life. Progress on this has been glacial, if there's been any at all. At some point, enough is going wrong with this country that there is going to be a mass of young and angry protestors that's never been seen before. The question of when it will happen hinges on when enough people can find enough interest and social cohesion to organize. For young people, this is not a political issue. It is an issue of inadequate and out of reach housing.

deleted 3y ago
[deleted]
qntmfred 3y ago
> enough is going wrong with this country that there is going to be a mass of young and angry protestors that's never been seen before says nearly every generation of ideal-minded and dissatisfied young people fwiw
- xwdv 3y ago
  Aye, one of the thing I came to realize as I grew old enough to know people younger than me who were not teens or children, is that every generation overestimates how much they’re going to change the world and underestimates how many of their peers will change their views and become some version of the things they once opposed, just on different issues or contexts. Boomers were once a very liberal generation.
  - blacksmith_tb 3y ago
    Sure, "Don't trust anyone over 30!" (or 25, or...) is just a claim that the preceding generations are too invested (in both senses) in the status quo to consider sweeping changes. Of course, sometimes sweeping changes are for the worse, so that doesn't seem to me like best battle cry, really.
  - bcrosby95 3y ago
    Boomers were liberal for their time. But society gets more liberal over time so, in comparison, they are no longer liberal.

nemo44x 3y ago

Land is an investment. And land that is in places people want to be is an exceptionally good investment.

jjoonathan 3y ago
Competition for land could be structured as 30 year leases (give or take), rather than perpetual ownership. Then A. prices don't reflect an asset premium and B. the surplus accrues to the public, rather than to rich people.
- nemo44x 3y ago
  30 year lease to who? Property rights and land ownership are the foundation this country is built on. You control this through property tax.
  - jjoonathan 3y ago
    Leases from the public to the person who wants the public to stay off a chunk of land. The perpetual ownership model is actually pretty weird: the public in 2023 agrees to stay off Bill Barnes' land in transferrable perpetuity in exchange for... a railroad built in 1850 that went defunct 100 years ago. And a dribble of property tax. Lol. Yes, the USA was founded by english nobility for english nobility. Is it really so surprising they upheld one of the most important institutions for ensuring that rich people can get paid for being rich? They also upheld slavery for similar reasons, though thankfully we sorted that one out 150 years ago.
    - nemo44x 3y ago
      Again, this is in effect what property tax does. You effectively lease the land from the government because the second you can’t or won’t pay your property tax they will take your land and sell it. Private ownership of land is actually in the governments best interest. Private individuals will improve land creating further tax. And buildings and people are the 2 things of value a government has. With private ownership the people are truly invested in the government and the government with the people.

ineedasername 3y ago

I’m not sure what you mean by allow. Rules and regulations preventing profits? Or outlawing financial instruments backed by mortgages? Owners have to prove all the money they’ve ever spent maintaining and improving the house w/ receipts and estimates in those costs after accounting for inflation, and only then selling it at a break even price? All apartment complexes operating at mandatory break even rates? I can tell you this: if I added up all home improvements, maintenance, and property taxes I’ve paid over 20 years then I’d take a significant loss when selling at current inflated values. Maybe when you look at the total cost of ownership for typical family owned homes then in many cases it’s not actually investment, maybe more like a savings account. That’s the best I’d get out of my home and I bought cheap w/ prices, inflated as they are, roughly 150% higher than my sticker price 20 years ago. The financial model for developers is of course different but if you’re going to look at home ownership as an investment for the owner then you can’t do that going from the buying price to selling price, you have add in all the costs of ownership. (Disclaimer: my TCO loss on my home despite rising prices would be do in large part because of truly massive property taxes.) I don’t see an easy way to outlaw the abilities for housing to be an investment. Even the it wouldn’t do anything at all to actually get people into housing, it would just make it more affordable for the lucky few who got to buy in at the reduced price. We just need to build more housing and have laws/regulations/rules in place that stop the NIMBY nonsense. No reasonable development can be denied if the increase in housing supply is lagging behind local increased population growth. Incentives to developers to build more than that minimum. Tax incentives for developers to keep prices within confines bands of local median incomes, tax penalties— a luxury tax— against selling a certain amount above these limits. And I don’t know, these may be really bad ideas too. But all I see disallowing investment accomplishing is to have housing inventory stagnate and make housing access partly a game of who you know to get an inside track— similar to how some affordable housing programs work right now. Around me, apartment complexes that are part of affordable housing programs have 2+ year waiting lists, some should be condemned and closed, but I’ve seen people pretty much walk into a recently opened space when they know someone who administers the program for that complex.

rcarr 3y ago
Here are some laws that partially curtail housing as investment: - ban anyone non-resident in the country from owning property - create an exponential property tax. 0% for first home, 2% for second home, 4% for third home, 8% for fourth home etc to discourage mass renting. - to make the point above easier to enforce, make it illegal for companies to own residential property other than a few exceptions such as developer companies holding newly built property that they’re selling, banks holding repossessions etc. All property must be owned by an individual citizen. - Mandate that developers build >50% affordable housing. Earmark this housing for first time buyers only. Non compliance means the developer is shut down and loses their license. - Mandate that developers build on their land or else have it seized by the government to avoid developers land banking and waiting it out for a change of administration which would reverse all the above rules so developers can go back to raking in absurd profits.