8 ms·

The problem with housing (in the States at least, can’t speak for other countries) is simple. Renters want housing to remain affordable and to increase no fast

The problem with housing (in the States at least, can’t speak for other countries) is simple. Renters want housing to remain affordable and to increase no faster than inflation. Owners expect (and bank on) the value of their house increasing faster than inflation. Both cannot be occur at the same time, at least not for long. As home prices increase, so too will rents. And if rent stays flat, the price of housing is forced to remain flat as well. Housing cannot simultaneously be affordable if it is also supposed to increase in value endlessly. Someone has to lose. To solve the housing crisis, Americans need to be deprogrammed out of this belief that owning a home is supposed to yield a return. It makes literally no sense to expect or feel entitled to a return just for owning property. Barring improvements the value of the home should depreciate slightly as the house gets older. That’s not to say that home values should never go up anywhere. As a city improves compared to other areas and brings more jobs and better services, home prices there should reflect the increased value associated with living in an area that is better than other places. Home prices should not being going up everywhere at the same time, which is what Americans expect to happen —- that almost all property should appreciate in value on average.

TheRealSteel 3y ago
Agreed. Being a landlord isn't a job. You aren't doing work, and don't deserve to be paid for doing nothing. Houses are for people to live in, not an investment.
- deleted 3y ago
  [deleted]
- jandrewrogers 3y ago
  Being a landlord is an enormous amount of work. I know a few and the amount of work is not worth it, it is why I would never be one.
- soligern 3y ago
  Being a landlord is a full time job. You’re essentially on call 24/7 or you have to pay someone else to do it out of your relatively thin margins.
- deleted 3y ago
  [deleted]
greyface- 3y ago
I don't view my home as an investment, or expect a return from it, but that hasn't stopped it from appreciating 50% in the past decade. How would deprogramming this belief more widely lead to a material change in market conditions?
- _vertigo 3y ago
  Your home has appreciated because you either live in an area that has gone through a major growth period (it has improved relative to other areas) or because other owners around you have voted to keep the value of their property increasing and your property has appreciated along with theirs as a result. Probably both. “Deprogramming” would help with the latter cause of appreciation. It would allow policy makers to enact laws and regulations to keep housing costs stable without facing a mass revolt from homeowners who have basically all made a $100K-$nM bet on their house increasing in value much faster than inflation.
asdfasgasdgasdg 3y ago
> To solve the housing crisis, Americans need to be deprogrammed out of this belief that owning a home is supposed to yield a return. It makes literally no sense to expect or feel entitled to a return just for owning property. You did nothing to earn $300K or however much your home appreciated since you bought it. I think people expect this because it happens. You will not be able to change the expectation without first making a dent in the phenomenon's consistency. So then we're back to the question about how to make housing costs go down. One way or another, a lot of new houses would have to be built, or rationing would have to occur.
- soupfordummies 3y ago
  How bout some rationing? There’s no reason a publicly traded company should be able to own thousands and thousands of houses.
26fingies 3y ago
> Housing cannot simultaneously be affordable if it is also supposed to increase in value endlessly. Someone has to lose. If there's a God and they are just then the renters would win.
- soligern 3y ago
  Not to all the current homeowners that have bought over the last 30 years which is a LOT of people. The only realistic way both sides win is with government mandated rent caps on some housing in dense urban areas coupled with opening up of newer markets in smaller cities where people without a lot of financial resources should be able to buy at lower rates while developing new urban centers.
  - 26fingies 3y ago
    We already have these things and it hasn't done any good. Housing is still treated as an investment (these new growing markets sound like an opportunity) and it gets passed down to the renters. Really though this is true of basically everything in our society, the lower classes essentially subsidize the higher classes. Below the lowest classes in North America are the poor of the rest of the world who are left with almost nothing.
semiquaver 3y ago
Setting homeowners and renters at odds in this way is a straw man, since these are two distinct stocks of housing that only affect each others prices indirectly, and are free to appreciate at different rates to some extent. It’s more appropriate to consider landlords vs renters, as they are on opposing sides of transactions involving the same housing. Contrary to your assertion, landlords are not primarily focused on the appreciation of the market value of their assets exceeding inflation but instead on achieving a reliable income stream from rents. This cash flow can be sustainably profitable under stable rents, so the structural conundrum you propose doesn’t exist in the real world.
- 26fingies 3y ago
  In Canada, at least, there are many people who have bought 2nd and 3rd+ homes and rented them out. There's more overlap between "landlord" and "homeowner" than you might think.
  - semiquaver 3y ago
    Sure, a single person can have multiple roles in the system. But this line: > Owners expect (and bank on) the value of their house increasing faster than inflation. may be true for an owner-occupier for whom price appreciation is the only way they can treat their house as an investment, but it’s not at all true for someone receiving monthly rents that exceed their costs. It’s like comparing the prices of two stocks while ignoring the large dividend payments paid by one of them.
- _vertigo 3y ago
  While not contending directly for the same stock, homeowners are very interested in matters that influence rental prices, albeit in less direct way, as you say. Try proposing to build affordable housing in a neighborhood and you’ll find yourself drowning in homeowners coming out of the woodwork complaining that “we want more affordable housing, but this project just isn’t right for our neighborhood.” I think we’re on the same page. As I wrote in my comment, rents and home prices cannot diverge >for long<, and you write that they can diverge >to some extent<. I think we are saying the same thing, just emphasizing different aspects of the same statement. > Contrary to your assertion, landlords are not primarily focused on the appreciation of the market value of their assets exceeding inflation but instead on achieving a reliable income stream from rents. This cash flow can be sustainably profitable under stable rents, so the structural conundrum you propose doesn’t exist in the real world. Rare is the landlord who continually settles for a stable rent when increasing it is feasible. As home prices rise, would-be buyers are forced out of the market and have to contend with existing renters, increasing demand for rental housing, which in turn causes rents to increase. Taxes on rental properties increase, also serving to increase rent.
bufferoverflow 3y ago
You forgot to account for 2 things: 1) population growth. If population grows faster than the housing, you would expect house prices to go up. 2) limited amount of land, especially in places where people want to live
zamfi 3y ago
> Housing cannot simultaneously be affordable if it is also supposed to increase in value endlessly. Someone has to lose. It can if density increases too. Existing home increases in price, but new homes being built are single-family homes torn down and replaced with 4-plexes, which are then replaced with apartment buildings in turn. Thus SFH price increases over inflation, “housing” price doesn’t have to, because new options are less pricy. > Renters want housing to remain affordable and to increase no faster than inflation. > Owners expect (and bank on) the value of their house increasing faster than inflation. Also: in many hot markets it costs more to buy than to rent, sometimes by 2x or more. Rental and owned stock are not always the same markets, not always the same housing even though it seems like they “have to be”.
nmfisher 3y ago
I came to exactly the same conclusion when looking at a far worse housing market (Australia). Promoting housing as a vehicle for middle class wealth creation will soon be viewed as one of the stupidest economic policies ever pursued by democratic countries. It's unsustainable for the exact reasons you laid out. I do wonder if a handful of countries (Canada and Australia in particular) are going to suffer drawn-out stagflation, since incomes need to increase to account for increased housing costs, but homeowners won't vote for anything that will temper their investments, so the cycle continues until demographics swing the voter base in favour of non-homeowners.
- brailsafe 3y ago
  Is Australia really worse than the major cities in Canada? What crazy examples have you seen?
  - nmfisher 3y ago
    I meant worse than the market the parent mentioned (USA). Canada is definitely worse than Australia, but the gap is narrowing.
deanCommie 3y ago
> To solve the housing crisis, Americans need to be deprogrammed out of this belief that owning a home is supposed to yield a return. It's not about programming or entitlement. It's because there is literally no other social safety net. Even here in Canada, where we laud our healthcare to Americans (despite it's massive flaws), there is no social safety net for retirement. For a substantial percentage of north american homeowners, the expectation is you hold on to your home, downsize when you retire, and live off the difference until you die. This needs to be fixed if we otherwise break this fundamental ssumption.
xscott 3y ago
> Americans need to be deprogrammed out of this belief that owning a home is supposed to yield a return I think you have the cause and effect reversed. They believe a home yields a return because it does. They aren't delusional or stupid - they're making money. There's nothing to "deprogram". Maybe dive one layer deeper and ask why investing in houses has been better than investing in stocks or bonds/CDs.
- etrautmann 3y ago
  Is it? I’m fairly certain that my returns on index funds beat risk adjusted real estate gambles in most markets over most time ranges.
  - etrautmann 3y ago
    And certainly when factoring in liquidity and peace of mind, which is different for different people but has real value to many.
  - AnimalMuppet 3y ago
    Houses are where the average person gets to be a leveraged investor. If I invest in an index fund and it goes up 10%, I've made 10%. If I invest in a house and it goes up 10%, but I invested with 5% down, I have tripled my money. But the reverse is also true. People are hugely sensitive to house prices falling, because they are leveraged. If I owned my home outright (no mortgage) and the value fell 10%, I wouldn't be happy. But if I had a mortgage with 5% down, all my equity got wiped out, and I'm now 5% underwater.
SomewhatLikely 3y ago
Housing wouldn't be expensive if you could teleport anywhere instantaneously. No matter how hard homeowners wanted to keep prices high. I see some much cheaper more luxurious homes listed in less dense cities than mine. I suspect we've finally begun to exhaust the available land within a reasonable commute from the top populated cities that was opened up after creating the interstates. If we found a way to reliably go twice as fast out of the city in many directions we'd open up four times as much land. I'd bet everything house prices would hardly rise for many years.
- cameldrv 3y ago
  Self driving cars might make a difference. The longest acceptable commute is longer if you don't have to drive it yourself.
  - antisthenes 3y ago
    If that leads to a significant increase in traffic, then the length of your commute will probably stay roughly the same at the tolerable level.
asah 3y ago
Unfortunately, this conflicts with basic tenets of how capital and free markets work: if you deny capital a market competitive return then the capital quickly moves elsewhere. For private housing, that means squalor and slums. Market competitive returns for housing need to account for taxes, maintenance and management, vacancies and risk. This needs to EXCEED stock market returns or prospective landlords put their capital into the market. Already, the US quietly subsidizes housing returns with tax policy including 1031 exchange, tax deductions for every conceivable expense and more -- and even then, residential real estate is risky, illiquid and a hassle vs just buying ETFs. This also affects builders: if they're starved of returns, they're quickly starved of capital, which means no new housing. Public housing can be a nice solution: compete with the free market by offering a low cost option devoid of the capital constraints. When this works, you get Swedish housing, when it doesn't you get NYCHA. It's worth nothing that neither one has kept up with demand, with very long waitlists. Neither system supports transfers out of region, which destroys social mobility i.e. great inventors/etc are not able to develop themselves and do great work because they can't afford to move. All of these is theoretically fixable, but extremely hard in practice. https://www.google.com/search?q=swedish+public+housing https://www.google.com/search?q=swedish+public+housing https://www.google.com/search?q=swedish+public+housing+waiting+list https://www.google.com/search?q=swedish+public+housing+waiti... https://www.google.com/search?q=nycha+assessment https://www.google.com/search?q=nycha+assessment --- Overall Findings Overall, the NYSDOH inspection teams found hazardous environmental and health conditions throughout the NYCHA system. Approximately 83 percent (212 out of 255) of all units inspected contained at least one high severity environmental quality hazard. Inspection teams found similar issues in building common areas with 75 percent (48 out of 64) containing at least one high severity hazard. The top three high severity issues found in NYCHA units were insect infestation (mostly cockroach infestations), issues with walls and/or floors and the presence of mold growth. https://www.governor.ny.gov/sites/default/files/atoms/files/FINAL_Assessment_of_NYCHA_Report.pdf https://www.governor.ny.gov/sites/default/files/atoms/files/...
- rich_sasha 3y ago
  In the UK, there is a similar mechanism, but also with a perverse twist. Housing is very expensive, and buying your first house is often a titanic effort. It requires years of saving, often ain informal loan from family and then a substantial mortgage. So once you buy this thing, your biggest fear is that it will depreciate. Never mind making money out of it. This creates a lot of very strong local NIMBYism, and in the UK it's not that hard for the local population to stop housing projects. When phrased like this, I do sympathise, even if it's "selfish". A mere announcement of new housing projects in the vicinity can cut your house value by 10%, or easily more. So we created a world where house owning club is super expensive to join, and once you're in, it is your existential imperative to keep house prices high. All this before you even say "appreciation". I posit that most people in the UK would be quite happy with affordable housing whose price is linked to inflation or sth.
hiisukun 3y ago
I own the house I live in and would prefer its value did not increase! What do I benefit if my house is worth more? I pay higher rates (council -- ie. local government), have less options to move house (because other houses are just like mine, increasing in cost), and it makes me less mobile for work (because rents are likely to be up elsewhere to). Owners who are using housing as an investment may want house prices to rise, but I don't. The shortfall between those two can be managed with tax, surely? I am no expert in this market, but owning one extra house would mean I assist with rental supply, owning two maybe moreso, but owning 5? 10? 100? Why is property tax not applied at a greater rate/value as the number of properties you own increases? And of course, if there is money to be made investing in housing, institutional investors will capture that value readily, as they have done in Australia (and probably elsewhere I would imagine).
pandaman 3y ago
Actually, when housing value grows faster than inflation, rents stay low, and you could have observed that yourself in 2010-2020, when the capital gains in the property value subsidized renters. When the growth stops is the time for rents to catch up. >To solve the housing crisis, Americans need to be deprogrammed out of this belief that owning a home is supposed to yield a return. Markets don't quite work like that. A seller will sell at the highest price offered (as same as the buyer will buy at the lowest price), if you were able to "deprogram" this behavior, you'd put the entire market, not just the real estate, in complete chaos.
- lotsofpulp 3y ago
  > A seller will sell at the highest price offered Not if the highest price offered is too low for the seller and they are sitting on a low fixed rate mortgage and/or low property taxes. That is the difference between land or space and most other items in the market. If the annual costs are low enough, many times it makes sense to just wait for the government to bring back easy money, and you get to profit for doing nothing.
  - pandaman 3y ago
    Someone who is not selling is not a seller, is he? And, predicting the next correction, someone who cannot afford to buy even at the lowest price, also, is not a buyer.
    - lotsofpulp 3y ago
      A properly functioning market requires lots of sellers and buyers. Hence people complaining about extended time of empty storefronts and empty housing, it shows the lack of a properly functioning market.
      - pandaman 3y ago
        This depends on your definition of "properly", a market doesn't require either. E.g. a market for fine art usually has no sellers most of the time, it might not be properly functioning but it's a market and still follows the same principle: people will sell for as much as they can possibly get and buy for as little as possible.

TheRealSteel 3y ago

Agreed. Being a landlord isn't a job. You aren't doing work, and don't deserve to be paid for doing nothing. Houses are for people to live in, not an investment.

deleted 3y ago
[deleted]
jandrewrogers 3y ago
Being a landlord is an enormous amount of work. I know a few and the amount of work is not worth it, it is why I would never be one.
soligern 3y ago
Being a landlord is a full time job. You’re essentially on call 24/7 or you have to pay someone else to do it out of your relatively thin margins.
deleted 3y ago
[deleted]

greyface- 3y ago

I don't view my home as an investment, or expect a return from it, but that hasn't stopped it from appreciating 50% in the past decade. How would deprogramming this belief more widely lead to a material change in market conditions?

_vertigo 3y ago
Your home has appreciated because you either live in an area that has gone through a major growth period (it has improved relative to other areas) or because other owners around you have voted to keep the value of their property increasing and your property has appreciated along with theirs as a result. Probably both. “Deprogramming” would help with the latter cause of appreciation. It would allow policy makers to enact laws and regulations to keep housing costs stable without facing a mass revolt from homeowners who have basically all made a $100K-$nM bet on their house increasing in value much faster than inflation.

asdfasgasdgasdg 3y ago

> To solve the housing crisis, Americans need to be deprogrammed out of this belief that owning a home is supposed to yield a return. It makes literally no sense to expect or feel entitled to a return just for owning property. You did nothing to earn $300K or however much your home appreciated since you bought it. I think people expect this because it happens. You will not be able to change the expectation without first making a dent in the phenomenon's consistency. So then we're back to the question about how to make housing costs go down. One way or another, a lot of new houses would have to be built, or rationing would have to occur.

soupfordummies 3y ago
How bout some rationing? There’s no reason a publicly traded company should be able to own thousands and thousands of houses.

26fingies 3y ago

> Housing cannot simultaneously be affordable if it is also supposed to increase in value endlessly. Someone has to lose. If there's a God and they are just then the renters would win.

soligern 3y ago
Not to all the current homeowners that have bought over the last 30 years which is a LOT of people. The only realistic way both sides win is with government mandated rent caps on some housing in dense urban areas coupled with opening up of newer markets in smaller cities where people without a lot of financial resources should be able to buy at lower rates while developing new urban centers.
- 26fingies 3y ago
  We already have these things and it hasn't done any good. Housing is still treated as an investment (these new growing markets sound like an opportunity) and it gets passed down to the renters. Really though this is true of basically everything in our society, the lower classes essentially subsidize the higher classes. Below the lowest classes in North America are the poor of the rest of the world who are left with almost nothing.

semiquaver 3y ago

Setting homeowners and renters at odds in this way is a straw man, since these are two distinct stocks of housing that only affect each others prices indirectly, and are free to appreciate at different rates to some extent. It’s more appropriate to consider landlords vs renters, as they are on opposing sides of transactions involving the same housing. Contrary to your assertion, landlords are not primarily focused on the appreciation of the market value of their assets exceeding inflation but instead on achieving a reliable income stream from rents. This cash flow can be sustainably profitable under stable rents, so the structural conundrum you propose doesn’t exist in the real world.

26fingies 3y ago
In Canada, at least, there are many people who have bought 2nd and 3rd+ homes and rented them out. There's more overlap between "landlord" and "homeowner" than you might think.
- semiquaver 3y ago
  Sure, a single person can have multiple roles in the system. But this line: > Owners expect (and bank on) the value of their house increasing faster than inflation. may be true for an owner-occupier for whom price appreciation is the only way they can treat their house as an investment, but it’s not at all true for someone receiving monthly rents that exceed their costs. It’s like comparing the prices of two stocks while ignoring the large dividend payments paid by one of them.
_vertigo 3y ago
While not contending directly for the same stock, homeowners are very interested in matters that influence rental prices, albeit in less direct way, as you say. Try proposing to build affordable housing in a neighborhood and you’ll find yourself drowning in homeowners coming out of the woodwork complaining that “we want more affordable housing, but this project just isn’t right for our neighborhood.” I think we’re on the same page. As I wrote in my comment, rents and home prices cannot diverge >for long<, and you write that they can diverge >to some extent<. I think we are saying the same thing, just emphasizing different aspects of the same statement. > Contrary to your assertion, landlords are not primarily focused on the appreciation of the market value of their assets exceeding inflation but instead on achieving a reliable income stream from rents. This cash flow can be sustainably profitable under stable rents, so the structural conundrum you propose doesn’t exist in the real world. Rare is the landlord who continually settles for a stable rent when increasing it is feasible. As home prices rise, would-be buyers are forced out of the market and have to contend with existing renters, increasing demand for rental housing, which in turn causes rents to increase. Taxes on rental properties increase, also serving to increase rent.

bufferoverflow 3y ago

You forgot to account for 2 things: 1) population growth. If population grows faster than the housing, you would expect house prices to go up. 2) limited amount of land, especially in places where people want to live

zamfi 3y ago

> Housing cannot simultaneously be affordable if it is also supposed to increase in value endlessly. Someone has to lose. It can if density increases too. Existing home increases in price, but new homes being built are single-family homes torn down and replaced with 4-plexes, which are then replaced with apartment buildings in turn. Thus SFH price increases over inflation, “housing” price doesn’t have to, because new options are less pricy. > Renters want housing to remain affordable and to increase no faster than inflation. > Owners expect (and bank on) the value of their house increasing faster than inflation. Also: in many hot markets it costs more to buy than to rent, sometimes by 2x or more. Rental and owned stock are not always the same markets, not always the same housing even though it seems like they “have to be”.

nmfisher 3y ago

I came to exactly the same conclusion when looking at a far worse housing market (Australia). Promoting housing as a vehicle for middle class wealth creation will soon be viewed as one of the stupidest economic policies ever pursued by democratic countries. It's unsustainable for the exact reasons you laid out. I do wonder if a handful of countries (Canada and Australia in particular) are going to suffer drawn-out stagflation, since incomes need to increase to account for increased housing costs, but homeowners won't vote for anything that will temper their investments, so the cycle continues until demographics swing the voter base in favour of non-homeowners.

brailsafe 3y ago
Is Australia really worse than the major cities in Canada? What crazy examples have you seen?
- nmfisher 3y ago
  I meant worse than the market the parent mentioned (USA). Canada is definitely worse than Australia, but the gap is narrowing.

deanCommie 3y ago

> To solve the housing crisis, Americans need to be deprogrammed out of this belief that owning a home is supposed to yield a return. It's not about programming or entitlement. It's because there is literally no other social safety net. Even here in Canada, where we laud our healthcare to Americans (despite it's massive flaws), there is no social safety net for retirement. For a substantial percentage of north american homeowners, the expectation is you hold on to your home, downsize when you retire, and live off the difference until you die. This needs to be fixed if we otherwise break this fundamental ssumption.

xscott 3y ago

> Americans need to be deprogrammed out of this belief that owning a home is supposed to yield a return I think you have the cause and effect reversed. They believe a home yields a return because it does. They aren't delusional or stupid - they're making money. There's nothing to "deprogram". Maybe dive one layer deeper and ask why investing in houses has been better than investing in stocks or bonds/CDs.

etrautmann 3y ago
Is it? I’m fairly certain that my returns on index funds beat risk adjusted real estate gambles in most markets over most time ranges.
- etrautmann 3y ago
  And certainly when factoring in liquidity and peace of mind, which is different for different people but has real value to many.
- AnimalMuppet 3y ago
  Houses are where the average person gets to be a leveraged investor. If I invest in an index fund and it goes up 10%, I've made 10%. If I invest in a house and it goes up 10%, but I invested with 5% down, I have tripled my money. But the reverse is also true. People are hugely sensitive to house prices falling, because they are leveraged. If I owned my home outright (no mortgage) and the value fell 10%, I wouldn't be happy. But if I had a mortgage with 5% down, all my equity got wiped out, and I'm now 5% underwater.

SomewhatLikely 3y ago

Housing wouldn't be expensive if you could teleport anywhere instantaneously. No matter how hard homeowners wanted to keep prices high. I see some much cheaper more luxurious homes listed in less dense cities than mine. I suspect we've finally begun to exhaust the available land within a reasonable commute from the top populated cities that was opened up after creating the interstates. If we found a way to reliably go twice as fast out of the city in many directions we'd open up four times as much land. I'd bet everything house prices would hardly rise for many years.

cameldrv 3y ago
Self driving cars might make a difference. The longest acceptable commute is longer if you don't have to drive it yourself.
- antisthenes 3y ago
  If that leads to a significant increase in traffic, then the length of your commute will probably stay roughly the same at the tolerable level.

asah 3y ago

Unfortunately, this conflicts with basic tenets of how capital and free markets work: if you deny capital a market competitive return then the capital quickly moves elsewhere. For private housing, that means squalor and slums. Market competitive returns for housing need to account for taxes, maintenance and management, vacancies and risk. This needs to EXCEED stock market returns or prospective landlords put their capital into the market. Already, the US quietly subsidizes housing returns with tax policy including 1031 exchange, tax deductions for every conceivable expense and more -- and even then, residential real estate is risky, illiquid and a hassle vs just buying ETFs. This also affects builders: if they're starved of returns, they're quickly starved of capital, which means no new housing. Public housing can be a nice solution: compete with the free market by offering a low cost option devoid of the capital constraints. When this works, you get Swedish housing, when it doesn't you get NYCHA. It's worth nothing that neither one has kept up with demand, with very long waitlists. Neither system supports transfers out of region, which destroys social mobility i.e. great inventors/etc are not able to develop themselves and do great work because they can't afford to move. All of these is theoretically fixable, but extremely hard in practice. https://www.google.com/search?q=swedish+public+housing https://www.google.com/search?q=swedish+public+housing https://www.google.com/search?q=swedish+public+housing+waiting+list https://www.google.com/search?q=swedish+public+housing+waiti... https://www.google.com/search?q=nycha+assessment https://www.google.com/search?q=nycha+assessment --- Overall Findings Overall, the NYSDOH inspection teams found hazardous environmental and health conditions throughout the NYCHA system. Approximately 83 percent (212 out of 255) of all units inspected contained at least one high severity environmental quality hazard. Inspection teams found similar issues in building common areas with 75 percent (48 out of 64) containing at least one high severity hazard. The top three high severity issues found in NYCHA units were insect infestation (mostly cockroach infestations), issues with walls and/or floors and the presence of mold growth. https://www.governor.ny.gov/sites/default/files/atoms/files/FINAL_Assessment_of_NYCHA_Report.pdf https://www.governor.ny.gov/sites/default/files/atoms/files/...

rich_sasha 3y ago
In the UK, there is a similar mechanism, but also with a perverse twist. Housing is very expensive, and buying your first house is often a titanic effort. It requires years of saving, often ain informal loan from family and then a substantial mortgage. So once you buy this thing, your biggest fear is that it will depreciate. Never mind making money out of it. This creates a lot of very strong local NIMBYism, and in the UK it's not that hard for the local population to stop housing projects. When phrased like this, I do sympathise, even if it's "selfish". A mere announcement of new housing projects in the vicinity can cut your house value by 10%, or easily more. So we created a world where house owning club is super expensive to join, and once you're in, it is your existential imperative to keep house prices high. All this before you even say "appreciation". I posit that most people in the UK would be quite happy with affordable housing whose price is linked to inflation or sth.

hiisukun 3y ago

I own the house I live in and would prefer its value did not increase! What do I benefit if my house is worth more? I pay higher rates (council -- ie. local government), have less options to move house (because other houses are just like mine, increasing in cost), and it makes me less mobile for work (because rents are likely to be up elsewhere to). Owners who are using housing as an investment may want house prices to rise, but I don't. The shortfall between those two can be managed with tax, surely? I am no expert in this market, but owning one extra house would mean I assist with rental supply, owning two maybe moreso, but owning 5? 10? 100? Why is property tax not applied at a greater rate/value as the number of properties you own increases? And of course, if there is money to be made investing in housing, institutional investors will capture that value readily, as they have done in Australia (and probably elsewhere I would imagine).

pandaman 3y ago

Actually, when housing value grows faster than inflation, rents stay low, and you could have observed that yourself in 2010-2020, when the capital gains in the property value subsidized renters. When the growth stops is the time for rents to catch up. >To solve the housing crisis, Americans need to be deprogrammed out of this belief that owning a home is supposed to yield a return. Markets don't quite work like that. A seller will sell at the highest price offered (as same as the buyer will buy at the lowest price), if you were able to "deprogram" this behavior, you'd put the entire market, not just the real estate, in complete chaos.

lotsofpulp 3y ago
> A seller will sell at the highest price offered Not if the highest price offered is too low for the seller and they are sitting on a low fixed rate mortgage and/or low property taxes. That is the difference between land or space and most other items in the market. If the annual costs are low enough, many times it makes sense to just wait for the government to bring back easy money, and you get to profit for doing nothing.
- pandaman 3y ago
  Someone who is not selling is not a seller, is he? And, predicting the next correction, someone who cannot afford to buy even at the lowest price, also, is not a buyer.
  - lotsofpulp 3y ago
    A properly functioning market requires lots of sellers and buyers. Hence people complaining about extended time of empty storefronts and empty housing, it shows the lack of a properly functioning market.
    - pandaman 3y ago
      This depends on your definition of "properly", a market doesn't require either. E.g. a market for fine art usually has no sellers most of the time, it might not be properly functioning but it's a market and still follows the same principle: people will sell for as much as they can possibly get and buy for as little as possible.