3 ms·

> or you strongly incentivize a lot of people to not go for this. By very definition if we do literally anything that makes housing more affordable, we make it

by grecy 3y ago

> or you strongly incentivize a lot of people to not go for this. By very definition if we do literally anything that makes housing more affordable, we make it less of a good invetment, which means a lot of people will not go for it. We already covered that in my first comment. Old people that own houses want them to be a good invesment. Young people that do not own houses want them to be affordable. Pick one group to make happy. > We can use the money they pay to fund building more housing Now you're complicating the issue and getting away from the core issue/problem here. Yes, building more houses would be great, but that is NOT the fundamental problem here. The fundamental problem that has to be addressed first, is that housing can not simultaneously be a good investment AND be affordable. We MUST fix that first.

jjav 3y ago
> Old people that own houses want them to be a good invesment. This sounds very simplistic. The majority of homeowners don't care. You talk a lot about investment but if you ask homeowners if their house is an investment or a home, the majority will say the latter. For homeowners who want to live in their home (as opposed to house flippers) the value of the house is not relevant. They live there, they plan to continue living there. Having the value go up is not good, it just means paying more taxes for the same home. It's better for the value to remain constant or even go down (same home, less taxes, yay!) > housing can not simultaneously be a good investment AND be affordable That's impossible from simple economics. As long as there is inflation (and there will always be inflation, it is a goal of the fed), a durable good cannot go down in price over the long haul (unless the whole city collapses like Detroit, but that's not good for anyone either). What you wish for is impossible.
- sokoloff 3y ago
  I think your last objection is either incorrect or at least an uncharitable/incurious read of GP. What do we mean by "good investment"? When I use that term, I generally mean something close to "someplace I can put my money and have it grow faster than inflation". In that sense, something that is a "good investment" will tend to get more expensive over time in real dollars (by definition). If housing is affordable at some moment in time and is a good investment, it will increase in real price until it becomes unaffordable at some moment in time. This argument is the fundamental reason that it's bad economic policy to try to make housing into an investment, but rather to have policies that tend to make it a poor investment, in order to preserve affordability.
  - jjav 3y ago
    > What do we mean by "good investment"? Housing is not a share of stock, it's a place you live in. So by good investment, I think the criteria is not that it beats any kind of index fund, but simply that it beats renting. Because you have to live somewhere. Either rent or buy. > to try to make housing into an investment What does this mean? Who is trying this? What do they do? As a homeowner who is reasonably (best I can) politically aware and always vote, I have never experienced these forces trying to make housing an investment. It's never been on the ballot here. > have policies that tend to make it a poor investment I believe that's impossible. Only way would be a dictatorship that says your house will be taken away from you and demolished every 30 years, or something like that. Would you want to live in such a world?
    - sokoloff 3y ago
      > So by good investment, I think the criteria is not that it beats any kind of index fund, but simply that it beats renting. By that logic, a used (rather than new) car is a good investment as well. Since they're a good investment, I guess I should load up on used cars.
      - jjav 3y ago
        A car is an expense. If you need one, it is indeed a much better financial choice to get a used one. But your needs probably don't scale, so you don't need ten cars, just one. You can't have an expense and make it up in volume to become profitable.
        sokoloff 3y ago
        Of course not, because finding a more efficient way to meet the needs which require an expenditure of money does not make that expenditure a good investment by the typical usage of that phrase. Same is true in used cars vs new cars and owner-occupied housing vs rented housing.

by grecy 3y ago

jjav 3y ago

> Old people that own houses want them to be a good invesment. This sounds very simplistic. The majority of homeowners don't care. You talk a lot about investment but if you ask homeowners if their house is an investment or a home, the majority will say the latter. For homeowners who want to live in their home (as opposed to house flippers) the value of the house is not relevant. They live there, they plan to continue living there. Having the value go up is not good, it just means paying more taxes for the same home. It's better for the value to remain constant or even go down (same home, less taxes, yay!) > housing can not simultaneously be a good investment AND be affordable That's impossible from simple economics. As long as there is inflation (and there will always be inflation, it is a goal of the fed), a durable good cannot go down in price over the long haul (unless the whole city collapses like Detroit, but that's not good for anyone either). What you wish for is impossible.

sokoloff 3y ago
I think your last objection is either incorrect or at least an uncharitable/incurious read of GP. What do we mean by "good investment"? When I use that term, I generally mean something close to "someplace I can put my money and have it grow faster than inflation". In that sense, something that is a "good investment" will tend to get more expensive over time in real dollars (by definition). If housing is affordable at some moment in time and is a good investment, it will increase in real price until it becomes unaffordable at some moment in time. This argument is the fundamental reason that it's bad economic policy to try to make housing into an investment, but rather to have policies that tend to make it a poor investment, in order to preserve affordability.
- jjav 3y ago
  > What do we mean by "good investment"? Housing is not a share of stock, it's a place you live in. So by good investment, I think the criteria is not that it beats any kind of index fund, but simply that it beats renting. Because you have to live somewhere. Either rent or buy. > to try to make housing into an investment What does this mean? Who is trying this? What do they do? As a homeowner who is reasonably (best I can) politically aware and always vote, I have never experienced these forces trying to make housing an investment. It's never been on the ballot here. > have policies that tend to make it a poor investment I believe that's impossible. Only way would be a dictatorship that says your house will be taken away from you and demolished every 30 years, or something like that. Would you want to live in such a world?
  - sokoloff 3y ago
    > So by good investment, I think the criteria is not that it beats any kind of index fund, but simply that it beats renting. By that logic, a used (rather than new) car is a good investment as well. Since they're a good investment, I guess I should load up on used cars.
    - jjav 3y ago
      A car is an expense. If you need one, it is indeed a much better financial choice to get a used one. But your needs probably don't scale, so you don't need ten cars, just one. You can't have an expense and make it up in volume to become profitable.
      - sokoloff 3y ago
        Of course not, because finding a more efficient way to meet the needs which require an expenditure of money does not make that expenditure a good investment by the typical usage of that phrase. Same is true in used cars vs new cars and owner-occupied housing vs rented housing.