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We have this problem in Canada as well, and it’s a hot discussion topic among younger generation. But I’m having a hard time convincing myself government would

by kredd 3y ago

We have this problem in Canada as well, and it’s a hot discussion topic among younger generation. But I’m having a hard time convincing myself government would ever intervene since majority of people actually own their homes. Why would that portion of demographic vote against their own asset? I’m assuming it’s somewhat the same problem in other countries as well. I’m a renter, and don’t have any plans to get into real estate market. That being said, I feel bad for people just getting out of college and looking for an apartment. If you’re not in a rent controlled unit, it’s a clown show everywhere.

whatshisface 3y ago
Democracies have a fundamental problem with majority oppression of minorities, because it is in the interest of 51% to vote away the belongings of the 49% in any case where they can be sure of their continued membership of whatever circumscribes the majority they belong to. Without population growth or immigration, I think the majority of homeowners may be permanent. I am not sure how the countries with home-owning majorities are going to get out of this conflict but in any case it will be a contest between a highly motivated minority and the majority. I guess history shows they can be won by the minority but not without a lot of organization and unrest. (Contrast this with autocracies, often associated with minorities like the Iraqi Shiites oppressing majorities like Iraqi Sunnis under Saddam's regime.)
- harambae 3y ago
  https://en.m.wikipedia.org/wiki/Tyranny_of_the_majority https://en.m.wikipedia.org/wiki/Tyranny_of_the_majority Certain aspects of the us government were put together to help counteract this, but yeah I agree to some extent. Maybe at some point the majority will be renters. It’s interesting to compare housing to automobile prices, because recently both seem to be in a bit of a bubble (and I say this as someone working in the auto industry). Easier to import cars from overseas though if the US dollar stays strong.
  - whatshisface 3y ago
    >Certain aspects of the us government were put together to help counteract this Yes, that's why I am able to say it with such confidence. :-) Although they were put in place to protect a specific minority (landowners with a high social standing in the colonies) and work by promoting the interests of those with well-established networks. Until now progressive reform has largely undone that over time, leading to more democracy.
vel0city 3y ago
> Why would that portion of demographic vote against their own asset? For me, taxes. As housing prices rise the taxes I pay increase making it more and more expensive to keep my home. I wouldn't mind if my house never appreciated in value or even lost a little, so long as it kept its place in the rest of the market. So long as I'm not underwater on my mortgage and it's still about the same value comparatively when I eventually need to move, I don't necessarily want it to go up.
- mitthrowaway2 3y ago
  > As housing prices rise the taxes I pay increase making it more and more expensive to keep my home. Is that true? Aside from certain areas that have a luxury tax, property taxes do not in general rise with average property values, because the coty budget is the independent variable, not the percentage. This means that cities with high property values actually become a lower-tax place to park a $10 million property investment.
  - kredd 3y ago
    Property gets assessed by government, a sticker price is put, and then the homeowner has to pay % of it as tax over here, as far as I know. Rinse and repeat every year.
    - mitthrowaway2 3y ago
      On the surface that's similar to how it's done here (BC Canada) but you have to look a bit deeper at the math. Otherwise you'll fall into the same sort of faulty reasoning as the "I don't want a raise to bump my tax bracket" people. For the most part, property taxes are not a fixed percentage the way that, say, sales taxes are. The rate floats, and that is important. Property taxes generally go to the municipality, which sets its budget based on its planned expenses (sewers, road maintenance, etc). The city decides it needs, say, $100 million for the next year, and let's say all of it will be paid for by property taxes. Then they calculate the total appraised value of all of the property in the city. Let's say that's $100 billion. From that budget and that sum, they derive a property-tax percentage for this year: 0.1%. Now if your property is worth $1 million, you have to pay $1000. Because your property tax rate is 0.1% and your property is worth $1 million, you might expect that if your property doubles in value to $2 million, your property tax will double. This is true if your property appreciates while the total value of the city property remains $100 billion. But most likely, if your property value has doubled, it's due to macroeconomic or region-wide trends that have caused everybody else's property value to double. Thus the total property value is now $200 billion, so your property tax rate drops to 0.05% to meet the city budget, and you still pay $1000. This makes sense, because your tax should not increase unless the city budget also increases. If your tax has increased, the culprit is your city budget; property values are irrelevant, because they only determine how the tax burden is divided up, not how much there is. If property values were much lower, the tax rate as a percentage would be much higher, and that's generally the case. Municipalities offering similar services, but where properties are more affordable, will have higher property tax rates. Therefore, if you need to invest $10 million in property for whatever reason, you'll pay a lower tax rate on that $10 million in an area where property values are high relative to the municipal budget, than in an area where property values are low relative to the municipal budget, even though the latter will probably buy you more total property.

by kredd 3y ago

whatshisface 3y ago

Democracies have a fundamental problem with majority oppression of minorities, because it is in the interest of 51% to vote away the belongings of the 49% in any case where they can be sure of their continued membership of whatever circumscribes the majority they belong to. Without population growth or immigration, I think the majority of homeowners may be permanent. I am not sure how the countries with home-owning majorities are going to get out of this conflict but in any case it will be a contest between a highly motivated minority and the majority. I guess history shows they can be won by the minority but not without a lot of organization and unrest. (Contrast this with autocracies, often associated with minorities like the Iraqi Shiites oppressing majorities like Iraqi Sunnis under Saddam's regime.)

harambae 3y ago
https://en.m.wikipedia.org/wiki/Tyranny_of_the_majority https://en.m.wikipedia.org/wiki/Tyranny_of_the_majority Certain aspects of the us government were put together to help counteract this, but yeah I agree to some extent. Maybe at some point the majority will be renters. It’s interesting to compare housing to automobile prices, because recently both seem to be in a bit of a bubble (and I say this as someone working in the auto industry). Easier to import cars from overseas though if the US dollar stays strong.
- whatshisface 3y ago
  >Certain aspects of the us government were put together to help counteract this Yes, that's why I am able to say it with such confidence. :-) Although they were put in place to protect a specific minority (landowners with a high social standing in the colonies) and work by promoting the interests of those with well-established networks. Until now progressive reform has largely undone that over time, leading to more democracy.

vel0city 3y ago

> Why would that portion of demographic vote against their own asset? For me, taxes. As housing prices rise the taxes I pay increase making it more and more expensive to keep my home. I wouldn't mind if my house never appreciated in value or even lost a little, so long as it kept its place in the rest of the market. So long as I'm not underwater on my mortgage and it's still about the same value comparatively when I eventually need to move, I don't necessarily want it to go up.

mitthrowaway2 3y ago
> As housing prices rise the taxes I pay increase making it more and more expensive to keep my home. Is that true? Aside from certain areas that have a luxury tax, property taxes do not in general rise with average property values, because the coty budget is the independent variable, not the percentage. This means that cities with high property values actually become a lower-tax place to park a $10 million property investment.
- kredd 3y ago
  Property gets assessed by government, a sticker price is put, and then the homeowner has to pay % of it as tax over here, as far as I know. Rinse and repeat every year.
  - mitthrowaway2 3y ago
    On the surface that's similar to how it's done here (BC Canada) but you have to look a bit deeper at the math. Otherwise you'll fall into the same sort of faulty reasoning as the "I don't want a raise to bump my tax bracket" people. For the most part, property taxes are not a fixed percentage the way that, say, sales taxes are. The rate floats, and that is important. Property taxes generally go to the municipality, which sets its budget based on its planned expenses (sewers, road maintenance, etc). The city decides it needs, say, $100 million for the next year, and let's say all of it will be paid for by property taxes. Then they calculate the total appraised value of all of the property in the city. Let's say that's $100 billion. From that budget and that sum, they derive a property-tax percentage for this year: 0.1%. Now if your property is worth $1 million, you have to pay $1000. Because your property tax rate is 0.1% and your property is worth $1 million, you might expect that if your property doubles in value to $2 million, your property tax will double. This is true if your property appreciates while the total value of the city property remains $100 billion. But most likely, if your property value has doubled, it's due to macroeconomic or region-wide trends that have caused everybody else's property value to double. Thus the total property value is now $200 billion, so your property tax rate drops to 0.05% to meet the city budget, and you still pay $1000. This makes sense, because your tax should not increase unless the city budget also increases. If your tax has increased, the culprit is your city budget; property values are irrelevant, because they only determine how the tax burden is divided up, not how much there is. If property values were much lower, the tax rate as a percentage would be much higher, and that's generally the case. Municipalities offering similar services, but where properties are more affordable, will have higher property tax rates. Therefore, if you need to invest $10 million in property for whatever reason, you'll pay a lower tax rate on that $10 million in an area where property values are high relative to the municipal budget, than in an area where property values are low relative to the municipal budget, even though the latter will probably buy you more total property.