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Homes shouldn't be an investment. They've accidentally become that in the past few decades, and as a result, affordability is getting worse. The better it doe

Homes shouldn't be an investment. They've accidentally become that in the past few decades, and as a result, affordability is getting worse. The better it does as an investment class, the worse it will become. It's a self perpetuating spiral. I don't see the market solving this. I only see some regulation helping here - ie any tax filer can at most own 1 SFH (this includes married couples). So no second, third, tenth homes. Corporations and foreign entities also cannot own SFH - bye bye black rock & China. Obviously some edge cases don't work (ie people who want to put their home in a trust), but generally speaking, people should not be able to own homes as investments.

janpieterz 2y ago
How do you suggest we handle the rental market?
- thereisnospork 2y ago
  The drastic solution is you ban long term rentals - all 'rental agreements' must return shares in the underlying real estate and structure proportional to length of stay. The rent payments would be distributed pro rata to the existing share holders. Of course you could also allow people to build homes at market clearing prices, so investments would just be undercut.
- jquery_dev 2y ago
  Being from UK: stop multi home ownership for private companies/persons. Move to majority council owned houses, which then feeds money back into the communities. Follow right to buy, where the money goes back to the council.
- lelandbatey 2y ago
  I think they'd suggest something like: "single family homes cannot be rented, only bought or sold to individuals or families which must live there some minimum percentage of the time." If zoning codes can make it effectively impossible to build anything but single family homes, we clearly have a legal framework for distinguishing single-family from multi-occupancy apartment buildings. Thus, apply this requirement to single-family homes (or at least homes in single-family zoned areas). There are a lot of unintended consequences and edge cases to this though, clearly. For example, I live in a building that is "technically" an apartment building right in the middle of nothing but single family homes. You couldn't build an apartment building like this here, now. This is because it was originally a single family home but was converted into a duplex ~100 years ago (2 different electrical services) and has remained a duplex legally ever since. I purchased the land and home jointly with a family member so that each of our families could live in one half of the duplex, which is how we currently live. A home like ours could end up being classified in very different ways depending on the specifics of a law like we're discussing. Regardless, I still want my home price to crater if it means everyone else I know can buy a home. I hope home prices go down massively and the residential speculative bubble in this country dies a violent death. The only reason we even bought this house was because buying a home cost so much money that we had to buy half a home to make it a possibility. Even if I'm upside down on this house, I'd still rather be stuck paying off the mortgage or going bankrupt than hold everyone else financially hostage. Housing is too important.
kbmckenna 2y ago
Restricting ownership may help but there are aren’t enough houses or apartments in the places people want to live. Building more housing is the best answer. It lowers the price because there is more supply. There simply aren’t enough homes in the Bay Area, NYC and many other major cities. If you could build many large apartments in the Bay Area you could fill it with people who’d rather live there compared to a tiny old overpriced house. Zoning and existing residents stop that from being built though.
- kajecounterhack 2y ago
  > Building more housing is the best answer. It lowers the price because there is more supply. There simply aren’t enough homes in the Bay Area, NYC and many other major cities. One problem is building more luxury housing leads to more rent-seekers / investment homes / transplants, which doesn't solve the problems the area faces (e.g. lower income families can't make it work, and in addition to it sucking for them, they staff lots of critical functions so it ends up sucking for everyone since the price of everything increases and you get a whole class of supercommuting low-income folks -- ask bay area folks about their daycare teachers). We need more _affordable_ housing, likely gated on AGI.
carlosjobim 2y ago
> They've accidentally become that There is no accident at all. The bankers decided that real estate should be the primary vehicle for new money to be created and released into circulation. This means that the increase in total real estate monetary value will always be larger than the monetary value of total labour and trade productivity within a nation. It is a mathematical fact that won't change unless the monetary system changes. In short: the landed gentry will always become richer while the non-landed will always become poorer, under this banking system. If you are both a real estate owner and a worker, then you should expect your main source of income to be the value increase in your real estate. If not already, then soon. So no matter how much the people of a nation work and increase their productivity, they will always be short and increasingly indebted, because the monetary system works that way. This is why there has been a frenzied rush into real estate the past decades, because the odds are stacked against you getting ahead by working.
- deleted 2y ago
  [deleted]
psunavy03 2y ago
This is justifying tyranny using pie-in-the-sky thinking. God forbid someone have a little lake house their parents and grandparents built that they want to retire to while working elsewhere. Nope, The Party says you can't have that dacha, Comrade. The proper answer is to accommodate the free choices made by others and regulate where they intersect with others, not paternalistically tell grown adults what they can and can't do.
nostrademons 2y ago
Having homes be investments is a good thing, in the original sense of "investment": something that you own which you put effort into in the hopes of making it better later. Incentives change dramatically as a homeowner in ways that are generally beneficial to the community: you are incentivized to improve the property, to maintain the property, to put effort into the local community in ways that make the land and location more valuable, and so on. I think that what you're complaining about is the financialization of investments, where every investment has an associated dollar value and that dollar value must always go up. This affects more than just homes. The need for monotonically-rising corporate earnings makes corporations pull all sorts of accounting shenanigans, it makes them cut costs and push sales until the product quality is the bare minimum people will buy, and it results in all sorts of pain for workers in the resulting reorgs and layoffs. The usage of Bitcoin as a token whose value just goes up has negatively hurt the development of the crypto economy, because people aren't actually using crypto, they're just hodling and hoping $$$ go up. The elephant in the room here is fiat currency, positive inflation targeting, and negative real interest rates. If you know that the dollar's value is eventually going to zero (which follows mathematically from inflation being an exponential curve), then the sum of the cash flows from any productive asset becomes infinite, and the only check on its value is that investors can't really reason about infinite time horizons. If inflation were targeted at zero (or at least some value that gave positive real interest rates), then that sum converges and you can speak about properly valuing assets and allocating capital efficiently.
- npoc 2y ago
  > because people aren't actually using crypto, they're just hodling and hoping $$$ go up. This is such a common mistake. By HODLing, you are using it - to store your wealth. This is what the bitcoin network is optimised for - storing large amounts of value for large periods of time. Nothing else has fundamental properties that come close for this use case.

janpieterz 2y ago

How do you suggest we handle the rental market?

thereisnospork 2y ago
The drastic solution is you ban long term rentals - all 'rental agreements' must return shares in the underlying real estate and structure proportional to length of stay. The rent payments would be distributed pro rata to the existing share holders. Of course you could also allow people to build homes at market clearing prices, so investments would just be undercut.
jquery_dev 2y ago
Being from UK: stop multi home ownership for private companies/persons. Move to majority council owned houses, which then feeds money back into the communities. Follow right to buy, where the money goes back to the council.
lelandbatey 2y ago
I think they'd suggest something like: "single family homes cannot be rented, only bought or sold to individuals or families which must live there some minimum percentage of the time." If zoning codes can make it effectively impossible to build anything but single family homes, we clearly have a legal framework for distinguishing single-family from multi-occupancy apartment buildings. Thus, apply this requirement to single-family homes (or at least homes in single-family zoned areas). There are a lot of unintended consequences and edge cases to this though, clearly. For example, I live in a building that is "technically" an apartment building right in the middle of nothing but single family homes. You couldn't build an apartment building like this here, now. This is because it was originally a single family home but was converted into a duplex ~100 years ago (2 different electrical services) and has remained a duplex legally ever since. I purchased the land and home jointly with a family member so that each of our families could live in one half of the duplex, which is how we currently live. A home like ours could end up being classified in very different ways depending on the specifics of a law like we're discussing. Regardless, I still want my home price to crater if it means everyone else I know can buy a home. I hope home prices go down massively and the residential speculative bubble in this country dies a violent death. The only reason we even bought this house was because buying a home cost so much money that we had to buy half a home to make it a possibility. Even if I'm upside down on this house, I'd still rather be stuck paying off the mortgage or going bankrupt than hold everyone else financially hostage. Housing is too important.

kbmckenna 2y ago

Restricting ownership may help but there are aren’t enough houses or apartments in the places people want to live. Building more housing is the best answer. It lowers the price because there is more supply. There simply aren’t enough homes in the Bay Area, NYC and many other major cities. If you could build many large apartments in the Bay Area you could fill it with people who’d rather live there compared to a tiny old overpriced house. Zoning and existing residents stop that from being built though.

kajecounterhack 2y ago
> Building more housing is the best answer. It lowers the price because there is more supply. There simply aren’t enough homes in the Bay Area, NYC and many other major cities. One problem is building more luxury housing leads to more rent-seekers / investment homes / transplants, which doesn't solve the problems the area faces (e.g. lower income families can't make it work, and in addition to it sucking for them, they staff lots of critical functions so it ends up sucking for everyone since the price of everything increases and you get a whole class of supercommuting low-income folks -- ask bay area folks about their daycare teachers). We need more _affordable_ housing, likely gated on AGI.

carlosjobim 2y ago

> They've accidentally become that There is no accident at all. The bankers decided that real estate should be the primary vehicle for new money to be created and released into circulation. This means that the increase in total real estate monetary value will always be larger than the monetary value of total labour and trade productivity within a nation. It is a mathematical fact that won't change unless the monetary system changes. In short: the landed gentry will always become richer while the non-landed will always become poorer, under this banking system. If you are both a real estate owner and a worker, then you should expect your main source of income to be the value increase in your real estate. If not already, then soon. So no matter how much the people of a nation work and increase their productivity, they will always be short and increasingly indebted, because the monetary system works that way. This is why there has been a frenzied rush into real estate the past decades, because the odds are stacked against you getting ahead by working.

deleted 2y ago
[deleted]

psunavy03 2y ago

This is justifying tyranny using pie-in-the-sky thinking. God forbid someone have a little lake house their parents and grandparents built that they want to retire to while working elsewhere. Nope, The Party says you can't have that dacha, Comrade. The proper answer is to accommodate the free choices made by others and regulate where they intersect with others, not paternalistically tell grown adults what they can and can't do.

nostrademons 2y ago

Having homes be investments is a good thing, in the original sense of "investment": something that you own which you put effort into in the hopes of making it better later. Incentives change dramatically as a homeowner in ways that are generally beneficial to the community: you are incentivized to improve the property, to maintain the property, to put effort into the local community in ways that make the land and location more valuable, and so on. I think that what you're complaining about is the financialization of investments, where every investment has an associated dollar value and that dollar value must always go up. This affects more than just homes. The need for monotonically-rising corporate earnings makes corporations pull all sorts of accounting shenanigans, it makes them cut costs and push sales until the product quality is the bare minimum people will buy, and it results in all sorts of pain for workers in the resulting reorgs and layoffs. The usage of Bitcoin as a token whose value just goes up has negatively hurt the development of the crypto economy, because people aren't actually using crypto, they're just hodling and hoping $$$ go up. The elephant in the room here is fiat currency, positive inflation targeting, and negative real interest rates. If you know that the dollar's value is eventually going to zero (which follows mathematically from inflation being an exponential curve), then the sum of the cash flows from any productive asset becomes infinite, and the only check on its value is that investors can't really reason about infinite time horizons. If inflation were targeted at zero (or at least some value that gave positive real interest rates), then that sum converges and you can speak about properly valuing assets and allocating capital efficiently.

npoc 2y ago
> because people aren't actually using crypto, they're just hodling and hoping $$$ go up. This is such a common mistake. By HODLing, you are using it - to store your wealth. This is what the bitcoin network is optimised for - storing large amounts of value for large periods of time. Nothing else has fundamental properties that come close for this use case.