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None of the measures mentioned in the article — lower interest rates, lower transaction fees, down payment subsidies — will lower costs. Every one of them will
by jeffbee 2y ago
None of the measures mentioned in the article — lower interest rates, lower transaction fees, down payment subsidies — will lower costs. Every one of them will raise prices. You can only fix this with supply: build homes.
- formerly_proven 2y agoThe good ol' "subsidize demand" approach to reducing prices. And if prices continue to climb? Well, just subsidize demand harder and in more diverse ways. I assure you, eventually price will fall. You just haven't subsidized the demand side enough yet.
- pdonis 2y agoThe GP didn't say "subsidize demand". They said "increase supply". They're different things.
- formerly_proven 2y agoIt's a response to his summary of the article, not a contradiction. > the measures mentioned in the article — lower interest rates, lower transaction fees, down payment subsidies
- pdonis 2y agoAh, got it. Sorry for the mixup on my part.
- technotony 2y agoThat's not the main source of the problem, it's governments printing money that's causing this.
- bsenftner 2y agoNo, it's the value of the dollar in free fall and our purchased economists not talking about it. It's the value of the dollar as reflected by the rest of the planet's confidence in the US, which is dropping faster than Trump can fall asleep and fart.
- bsenftner 2y agoMake home ownership and renting them back to single families by corporations illegal. Seriously. It's the corporations doing ALL this. The people don't have the money.
- baal80spam 2y ago> It's the corporations doing ALL this. The people don't have the money. Maybe it's like that in America. In EU, where the investment 'culture' is different, there are hordes of people not knowing what to do with their money and buying homes only to sell them at a higher price (flippers). Case in point: Poland, where the housing market is quite bonkers - especially in big cities.
- criddell 2y agoIf you buy a second home as an investment property and plan to rent it out to a single family, your accountant and lawyer will probably recommend you form a corporation to operate under. Just having a flat rule against corporations owning property will likely reduce the number of rentals available and a reduced supply will lead to higher prices.
- Pet_Ant 2y agoOne of the key factors is the increased migration for China and India. While people did emmigrate before, it was much lower. So effectively they were walled off into their own pocket. Now, most of my co-workers are immigrants from India. It's like the rest of world's population is jumping by 2 billion. That is going to change the value of everything related to populations and living.
- callalex 2y agoGot any numbers to back up this claim?
- JKCalhoun 2y agoThey're building constantly here in Omaha, Nebraska. Affordable though? Apparently not. I mean if you have a lot for development are you going to build a $200K home or a $600K one on that lot?
- thfuran 2y agoSingle family homes are profoundly inefficient in so many ways. They're pretty much doomed to be expensive housing.
- jeffbee 2y agoIt sounds like you have shifting baseline syndrome. Omaha last year built fewer houses than had built 25 years ago, but the city is a third larger than it was 25 years ago. So in fact it is building slower than it did in the past.
- JKCalhoun 2y agoI don't doubt you have the numbers. I've only been here three years. I live on the west end of town where (seemingly) all the new construction is going on.
- jeffbee 2y agoSure. New housing units permitted: https://fred.stlouisfed.org/series/OMAH531BPPRIV https://fred.stlouisfed.org/series/OMAH531BPPRIV Population Omaha (note: change in statistical area): https://fred.stlouisfed.org/series/OMAPOP https://fred.stlouisfed.org/series/OMAPOP Housing starts per 1000 residents: https://fred.stlouisfed.org/series/OMAPOP https://fred.stlouisfed.org/series/OMAPOP
- moffkalast 2y agoDoesn't work, China built entire ghost cities and they were all bought up by investment firms and the prices remained sky high. We need laws against corporate ownership of residential housing, simple as.
- micromacrofoot 2y agolooking at China and applying that example to the US is absurd, these are entirely different situations for one the "ghost towns" of China are in places no one wants to live, the complete opposite of what the US (or anyone) needs to do
- jeffbee 2y agoThe other reason this is absurd is because after the American press lost interest in making fun of Chinese "ghost cities" Chinese people moved into those cities. It's a case of Americans making fun of another country for planning ahead.
- zenapollo 2y agoThere’s another way to fix it. You can regulate financial speculators. In the US 1/4 of all US homes are owned by financial institutions. I doubt it’s very different in Europe unless they are regulated. This situation ensures only the rich can own a home as buyers are competing against hedge funds.
- silverquiet 2y agoYes, the “just build houses” contingent seems unaware that people (and as Mitt Romney famously said, “corporations are people too”) can own more than one house. Supply is certainly an issue, but inequality is as well.
- tootie 2y agoMitt Romney was not talking corporate personhood. He meant corporations are run by human beings.
- silverquiet 2y agoI don’t remember the context that well, so you may be correct about that, but I think I disagree with him then - I think corporations are made of humans, but they are machines (perhaps primitive AIs) and are as uncaring as a lawnmower.
- tootie 2y agoEvery time a mob of people get together responsibility becomes diffuse. You may see a corporation do something negative that was the cumulative result of 100 human beings who thought they were doing what they were supposed to. People who saw themselves as not able to directly control the outcome. Same for any large group of people up to and including nations.
- kevinmershon 2y agoYep. Homes can either be for shelter or for investment, but not both. We are experiencing this as a global culture. I dream of a 100% tax rate on second homes, foreign ownership, and corporations owning single family homes and condos. Or even better, make it illegal. But any politician who pushes such a bill would immediately get removed from office and the law repealed.