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We can debate another time whether or not it’s good for real estate, a necessity for life, should also be a financial instrument. Right now in the US, and most

We can debate another time whether or not it’s good for real estate, a necessity for life, should also be a financial instrument. Right now in the US, and most other countries, it is. As long as it is being treated as an investment, that means people can profit from it. It also means people have to sometimes take a loss, maybe even a big one. Investing means accepting risk. Too much of our laws, policies, and behaviors surrounding real estate seek to remove this risk. How come homeowners and real estate investors get so much help and insurance from government to make sure their investment never goes sour? Why can’t we get that kind of protection on stock market investments? Yeah, it will probably have big economic consequences if people have to lose money on real estate. Landlords won’t be able to set rent high enough to cover their expenses. Homeowners won’t be able to sell at a price high enough to cover their remaining mortgage. But hey, they invested, they have to be able to lose and suffer the consequences. It will have huge benefits for other people who have money and want homes, as they’ll be able to finally buy low.

afiori 2y ago
The solution to "housing is a heavily artificial financial instrument" is not to make it more chaotic, it is to not make it a financial instrument.
- jjav 2y ago
  > it is to not make it a financial instrument How exactly would you do that, considering a home is inherently valuable?
  - afiori 2y ago
    I will not be able to properly argue this point, so I will instead point to the words of who can do it better: https://www.strongtowns.org/journal/2024/3/4/how-fannie-mae-puts-a-chokehold-on-local-home-financing-solutions?rq=fannie https://www.strongtowns.org/journal/2024/3/4/how-fannie-mae-... (this one is not about housing but it is the same concept) https://slatestarcodex.com/2015/06/06/against-tulip-subsidies/ https://slatestarcodex.com/2015/06/06/against-tulip-subsidie...
    - jjav 2y ago
      > I will not be able to properly argue this point, so I will instead point to the words of who can do it better: I read the whole blog with an open mind, but it doesn't in any way address how he'd propose making housing not be a valuable asset. It really just reads like a long rant. Housing is valuable (we all agree, otherwise these discussion about how to acquire it would not happen). How, exactly, could something that is valuable not be wealth?
      - afiori 2y ago
        the problem is not that housing is wealth, but that housing is a financial intrument. In the current system the housing subsidies are not structured to facilitate buying a house using debt by people that do not have access to enough capital, rather they are designed to be a profitable financial instrument to be repackaged and sold. One solution for example is to build more cheaper less profitable housing
        jjav 2y ago
        > the problem is not that housing is wealth, but that housing is a financial intrument. I agree that a house is a home and should always be seen as a home, it is not a stock certificate. But perception aside, what would this mean? If something is wealth, how would it not be a financial instrument? > In the current system the housing subsidies are not structured to facilitate buying a house using debt by people that do not have access to enough capital, rather they are designed to be a profitable financial instrument to be repackaged and sold. Can you expand on what this means? I know mortgages are repackaged and sold, but a mortgage is not the house. > One solution for example is to build more cheaper less profitable housing Well, sure. But how to attract home builders to build at a loss?
        fragmede 2y ago
        give them money so they're not, aka subsidies
- Apreche 2y ago
  Did you not read the first sentence of my comment?

afiori 2y ago

The solution to "housing is a heavily artificial financial instrument" is not to make it more chaotic, it is to not make it a financial instrument.

jjav 2y ago
> it is to not make it a financial instrument How exactly would you do that, considering a home is inherently valuable?
- afiori 2y ago
  I will not be able to properly argue this point, so I will instead point to the words of who can do it better: https://www.strongtowns.org/journal/2024/3/4/how-fannie-mae-puts-a-chokehold-on-local-home-financing-solutions?rq=fannie https://www.strongtowns.org/journal/2024/3/4/how-fannie-mae-... (this one is not about housing but it is the same concept) https://slatestarcodex.com/2015/06/06/against-tulip-subsidies/ https://slatestarcodex.com/2015/06/06/against-tulip-subsidie...
  - jjav 2y ago
    > I will not be able to properly argue this point, so I will instead point to the words of who can do it better: I read the whole blog with an open mind, but it doesn't in any way address how he'd propose making housing not be a valuable asset. It really just reads like a long rant. Housing is valuable (we all agree, otherwise these discussion about how to acquire it would not happen). How, exactly, could something that is valuable not be wealth?
    - afiori 2y ago
      the problem is not that housing is wealth, but that housing is a financial intrument. In the current system the housing subsidies are not structured to facilitate buying a house using debt by people that do not have access to enough capital, rather they are designed to be a profitable financial instrument to be repackaged and sold. One solution for example is to build more cheaper less profitable housing
      - jjav 2y ago
        > the problem is not that housing is wealth, but that housing is a financial intrument. I agree that a house is a home and should always be seen as a home, it is not a stock certificate. But perception aside, what would this mean? If something is wealth, how would it not be a financial instrument? > In the current system the housing subsidies are not structured to facilitate buying a house using debt by people that do not have access to enough capital, rather they are designed to be a profitable financial instrument to be repackaged and sold. Can you expand on what this means? I know mortgages are repackaged and sold, but a mortgage is not the house. > One solution for example is to build more cheaper less profitable housing Well, sure. But how to attract home builders to build at a loss?
        fragmede 2y ago
        give them money so they're not, aka subsidies
Apreche 2y ago
Did you not read the first sentence of my comment?