6 ms·

This is so fundamental to the issue. It is impossible for housing to be simultaneously a good investment and affordable. Policymakers simply have to decide if

by grecy 2y ago

This is so fundamental to the issue. It is impossible for housing to be simultaneously a good investment and affordable. Policymakers simply have to decide if they cater to those that already own homes, or those desperately wanting to buy one. I feel strongly housing is a basic human right, and so we should stop viewing residential property as an appreciating asset.

throwaway1105q 2y ago
Housing can be an asset and a basic right. The rights based housing just isn't in the center of a capital city. Also, do you mean housing ownership, or just housing? People can be housed in houses they don't own too - and it's probably better if it's owned by the municipality.
- mrcode007 2y ago
  An asset produces cash flow. Primary residence can only be a speculation device because for a majority of people it does not produce a cash flow. Instead it produces expenses.
  - s1artibartfast 2y ago
    nonsense. A primary residence obviously provides utility in the form of shelter for the owner. No assets directly produce cashflow, whether they are factories, tractors, or tools.
    - mrcode007 2y ago
      Utility is not an asset. When you grow up with your parents they provide shelter, you get a utility of it. No asset for you. Majority of assets produce cash flow (e.g. licensing software - IP asset, renting real estate to someone - you get monthly rent, bond - coupon payments, stock - you get dividends, etc)
      - throwaway1105q 2y ago
        Assets don't have to produce any cash flow. Most popularly, gold. Stocks that provide stable dividends are also less and less usual. Assets can just hold their real value compared to inflation and that's useful enough - even losing value slower than inflation is still good.
        mrcode007 2y ago
        FASB defines an asset as: “A present right of an entity to an economic benefit”. “Essential to the definition of an asset is a right to an "economic benefit" —the capacity to provide services or benefits to the entities that use them. Generally, in a business entity, that economic benefit eventually results in potential net cash inflows to the entity. In a not-for-profit entity, that economic benefit is used to provide desired or needed goods or services to beneficiaries or other constituents, which may or may not directly result in net cash inflows to the entity.“ It also says “incurring a cost to acquire an item does not in itself qualify an item to meet the definition of the asset” https://www.fasb.org/Page/ShowPdf?path=Concepts_Statement_8-Chapter_4-Elements.pdf&title=CONCEPTS+STATEMENT+NO.+8%E2%80%94CONCEPTUAL+FRAMEWORK+FOR+FINANCIAL+REPORTING%E2%80%94CHAPTER+4%252C+ELEMENTS+OF+FINANCIAL+STATEMENTS&acceptedDisclaimer=true&Submit= https://www.fasb.org/Page/ShowPdf?path=Concepts_Statement_8-...
        throwaway1105q 2y ago
        Not sure how is an accounting book relevant. I'd rather ask a tax consultant - the definitions are slightly but significantly different. Anyways, even by your book's definition - later sale for a higher price is economic benefit, protection against inflation is one too. This link considers your viewpoint too: https://www.investopedia.com/terms/a/asset.asp https://www.investopedia.com/terms/a/asset.asp
        mrcode007 2y ago
        I’m trying to say that under mortgage, a property isn’t your asset. It’s a bank’s asset. The mortgage is booked under asset side on the balance sheet of the bank. It cannot be booked as an asset on your side. The economy wouldn’t balance. Until you actually paid off stuff the home is a liability. You pay money on it every month (negative cash flow) and that cash flow accrues to the bank (positive cash flow). I don’t know in what definition an asset produces a negative cash flow. It’s a liability under most definitions. Maybe I’m wrong. I’m not an accountant.
    - fragmede 2y ago
      an investment property with a renter in it produces rental income for the landlord, and cash is currently giving me 5% returns for just sitting in the bank.
      - s1artibartfast 2y ago
        I guess I wasnt very clear. I meant that generating income isnt the definition of an asset. A house is an asset if you have a renter in it or not. It can also be utilized to generate income.
        fragmede 2y ago
        oh that makes sense
s1artibartfast 2y ago
Housing fundamentally IS and should be a good investment for the homeowner. It retains it's functionality over time, and saves the owner considerable rental expenses. Think about what conditions would need to be true for housing to be a bad investment. >I feel strongly housing is a basic human right, and so we should stop viewing residential property as an appreciating asset. Its not about "views", it is about reality. You cant simply wish an alternative into existence by closing your eyes.
- grecy 2y ago
  > Think about what conditions would need to be true for housing to be a bad investment The most simple of all - It goes down in price.
  - jjav 2y ago
    > The most simple of all - It goes down in price. I mean yes, of course, tautologically. But can you at least attempt to explain how something that has a lot of value and can last for centuries, is realistically going to go down in price given inflation? In general the only scenario where housing can go down in value is if the area/city is decaying. But then you don't want to live there so that's not a useful solution.
    - grecy 2y ago
      OK, so it can appreciate with inflation. So it doesn't go up or down, it just stays the same. This can be done by changing who is even allowed to own them, and what they're allowed to do with them. Make it unbelievably unattractive to have "investment properties" - massive taxes, extremely high interest rates, very restrictive rental laws, and all of them go up by an order of magnitude for each successive residential property owned. So now suddenly nobody (especially not corporations) want to actually own residential property for the purpose of making money. It won't be a good place to put money, because it doesn't make money in the same way bonds or the stock market will. So now demand has gone WAAAAY down. And then prices come down, because the only people who really do want to buy residential property are people that need a place to live, not people (or companies) looking to make a profit from that property. We wouldn't let a couple of private companies buy all the drinking water or air and then sell it back to us for the purpose of making a profit. Those are as essential to a good life as a place to live. Obviously rich people, and people (and companies) making profit from residential property don't like this idea. But we need to provide people a place to live, not companies a way to make profit.
jjav 2y ago
> It is impossible for housing to be simultaneously a good investment and affordable. This is one of those meme-phrases that no longer really means anything. > Policymakers simply have to decide if they cater to those that already own homes, or those desperately wanting to buy one. What exactly would you propose this means? A house is always going to appreciate over the long haul on average, simply due to inflation. Are you proposing policymakers should decide to make inflation go away? (If it were so simple to accomplish that!)
- grecy 2y ago
  > This is one of those meme-phrases that no longer really means anything. It means exactly what it says it means. You can either making residential housing something that regular people earning regular salaries can afford to purchase, or you make it a vehicle for investment to grow money, so that rich people, and companies and brokerages and all the rest want to park their money there so that it will grow rapidly. > What exactly would you propose this means? Policymakers could decide to implement laws to limit how much of an "investment" housing can be. Obvious choices are limiting houses to only be owned by humans, limiting how many each human can have and penalties (tax or otherwise) for trying to "make money" from owning residential housing. > A house is always going to appreciate over the long haul on average, simply due to inflation. Residential property appreciates WAY faster than inflation. Since covid most Canadian houses are up at least 50%. Has inflation been at 50% during that time?
  - jjav 2y ago
    > Policymakers could decide to implement laws to limit how much of an "investment" housing can be. How, exactly? > Obvious choices are limiting houses to only be owned by humans, limiting how many each human can have These are great and I fully support such rules. They will not make houses depreciate though. They'll make more of them owned by regular people instead of rental conglomerates, which is a wonderful outcome. But it won't make them depreciate. > penalties (tax or otherwise) for trying to "make money" from owning residential housing You make money from owning housing merely by owning and living in it. How are you looking to punish homeowners?

by grecy 2y ago

throwaway1105q 2y ago

Housing can be an asset and a basic right. The rights based housing just isn't in the center of a capital city. Also, do you mean housing ownership, or just housing? People can be housed in houses they don't own too - and it's probably better if it's owned by the municipality.

mrcode007 2y ago
An asset produces cash flow. Primary residence can only be a speculation device because for a majority of people it does not produce a cash flow. Instead it produces expenses.
- s1artibartfast 2y ago
  nonsense. A primary residence obviously provides utility in the form of shelter for the owner. No assets directly produce cashflow, whether they are factories, tractors, or tools.
  - mrcode007 2y ago
    Utility is not an asset. When you grow up with your parents they provide shelter, you get a utility of it. No asset for you. Majority of assets produce cash flow (e.g. licensing software - IP asset, renting real estate to someone - you get monthly rent, bond - coupon payments, stock - you get dividends, etc)
    - throwaway1105q 2y ago
      Assets don't have to produce any cash flow. Most popularly, gold. Stocks that provide stable dividends are also less and less usual. Assets can just hold their real value compared to inflation and that's useful enough - even losing value slower than inflation is still good.
      - mrcode007 2y ago
        FASB defines an asset as: “A present right of an entity to an economic benefit”. “Essential to the definition of an asset is a right to an "economic benefit" —the capacity to provide services or benefits to the entities that use them. Generally, in a business entity, that economic benefit eventually results in potential net cash inflows to the entity. In a not-for-profit entity, that economic benefit is used to provide desired or needed goods or services to beneficiaries or other constituents, which may or may not directly result in net cash inflows to the entity.“ It also says “incurring a cost to acquire an item does not in itself qualify an item to meet the definition of the asset” https://www.fasb.org/Page/ShowPdf?path=Concepts_Statement_8-Chapter_4-Elements.pdf&title=CONCEPTS+STATEMENT+NO.+8%E2%80%94CONCEPTUAL+FRAMEWORK+FOR+FINANCIAL+REPORTING%E2%80%94CHAPTER+4%252C+ELEMENTS+OF+FINANCIAL+STATEMENTS&acceptedDisclaimer=true&Submit= https://www.fasb.org/Page/ShowPdf?path=Concepts_Statement_8-...
        throwaway1105q 2y ago
        Not sure how is an accounting book relevant. I'd rather ask a tax consultant - the definitions are slightly but significantly different. Anyways, even by your book's definition - later sale for a higher price is economic benefit, protection against inflation is one too. This link considers your viewpoint too: https://www.investopedia.com/terms/a/asset.asp https://www.investopedia.com/terms/a/asset.asp
        mrcode007 2y ago
        I’m trying to say that under mortgage, a property isn’t your asset. It’s a bank’s asset. The mortgage is booked under asset side on the balance sheet of the bank. It cannot be booked as an asset on your side. The economy wouldn’t balance. Until you actually paid off stuff the home is a liability. You pay money on it every month (negative cash flow) and that cash flow accrues to the bank (positive cash flow). I don’t know in what definition an asset produces a negative cash flow. It’s a liability under most definitions. Maybe I’m wrong. I’m not an accountant.
  - fragmede 2y ago
    an investment property with a renter in it produces rental income for the landlord, and cash is currently giving me 5% returns for just sitting in the bank.
    - s1artibartfast 2y ago
      I guess I wasnt very clear. I meant that generating income isnt the definition of an asset. A house is an asset if you have a renter in it or not. It can also be utilized to generate income.
      - fragmede 2y ago
        oh that makes sense

s1artibartfast 2y ago

Housing fundamentally IS and should be a good investment for the homeowner. It retains it's functionality over time, and saves the owner considerable rental expenses. Think about what conditions would need to be true for housing to be a bad investment. >I feel strongly housing is a basic human right, and so we should stop viewing residential property as an appreciating asset. Its not about "views", it is about reality. You cant simply wish an alternative into existence by closing your eyes.

grecy 2y ago
> Think about what conditions would need to be true for housing to be a bad investment The most simple of all - It goes down in price.
- jjav 2y ago
  > The most simple of all - It goes down in price. I mean yes, of course, tautologically. But can you at least attempt to explain how something that has a lot of value and can last for centuries, is realistically going to go down in price given inflation? In general the only scenario where housing can go down in value is if the area/city is decaying. But then you don't want to live there so that's not a useful solution.
  - grecy 2y ago
    OK, so it can appreciate with inflation. So it doesn't go up or down, it just stays the same. This can be done by changing who is even allowed to own them, and what they're allowed to do with them. Make it unbelievably unattractive to have "investment properties" - massive taxes, extremely high interest rates, very restrictive rental laws, and all of them go up by an order of magnitude for each successive residential property owned. So now suddenly nobody (especially not corporations) want to actually own residential property for the purpose of making money. It won't be a good place to put money, because it doesn't make money in the same way bonds or the stock market will. So now demand has gone WAAAAY down. And then prices come down, because the only people who really do want to buy residential property are people that need a place to live, not people (or companies) looking to make a profit from that property. We wouldn't let a couple of private companies buy all the drinking water or air and then sell it back to us for the purpose of making a profit. Those are as essential to a good life as a place to live. Obviously rich people, and people (and companies) making profit from residential property don't like this idea. But we need to provide people a place to live, not companies a way to make profit.

jjav 2y ago

> It is impossible for housing to be simultaneously a good investment and affordable. This is one of those meme-phrases that no longer really means anything. > Policymakers simply have to decide if they cater to those that already own homes, or those desperately wanting to buy one. What exactly would you propose this means? A house is always going to appreciate over the long haul on average, simply due to inflation. Are you proposing policymakers should decide to make inflation go away? (If it were so simple to accomplish that!)

grecy 2y ago
> This is one of those meme-phrases that no longer really means anything. It means exactly what it says it means. You can either making residential housing something that regular people earning regular salaries can afford to purchase, or you make it a vehicle for investment to grow money, so that rich people, and companies and brokerages and all the rest want to park their money there so that it will grow rapidly. > What exactly would you propose this means? Policymakers could decide to implement laws to limit how much of an "investment" housing can be. Obvious choices are limiting houses to only be owned by humans, limiting how many each human can have and penalties (tax or otherwise) for trying to "make money" from owning residential housing. > A house is always going to appreciate over the long haul on average, simply due to inflation. Residential property appreciates WAY faster than inflation. Since covid most Canadian houses are up at least 50%. Has inflation been at 50% during that time?
- jjav 2y ago
  > Policymakers could decide to implement laws to limit how much of an "investment" housing can be. How, exactly? > Obvious choices are limiting houses to only be owned by humans, limiting how many each human can have These are great and I fully support such rules. They will not make houses depreciate though. They'll make more of them owned by regular people instead of rental conglomerates, which is a wonderful outcome. But it won't make them depreciate. > penalties (tax or otherwise) for trying to "make money" from owning residential housing You make money from owning housing merely by owning and living in it. How are you looking to punish homeowners?