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It's a much bigger group than homeowners. Banks don't want housing prices to fall, since then homeowners start foreclosing and then banks lose interest payments
by jerlam 1y ago
It's a much bigger group than homeowners. Banks don't want housing prices to fall, since then homeowners start foreclosing and then banks lose interest payments and own undesired property. Cities don't want housing prices to fall, since they were counting on money from developers and property taxes.
- waldohatesyou 1y agoI don’t agree with this take, we’re overly simplifying the nature of housing here. It depends on the housing mix as well. If the vast majority of the pro-housing prices crowd is heavily invested in single family residential then they should favour widespread upzoning and deregulation of apartments because that would increase the value of their SFHs through two mechanisms: 1) presumably single family homes will be destroyed so any remaining single family homes become more valuable and 2) every single family home is now a potential townhouse or high density building which increases the value a developer would pay for it. Are there any serious objections to that line of reasoning?
- jerlam 1y agoNo, what you said is mostly correct; but I'm mostly talking about not having home prices go down, which is different but related. There are different kinds of homeowners. There are those who are flipping houses and directly betting that the values go up, which is the crowd that you're describing. But at least in my area of the world, the majority of the anti-housing crowd is just old and is more anti-change than anything else. Even if the value of their home skyrockets even more, they won't sell and move. Their complaints are more about noise, traffic, and "quality of life" than home values.
- jollyllama 1y agoBut assuming that the upzoning and deregulation doesn't happen, isn't their calculation correct?
- prawn 1y agoI think the value of their main residence is a bigger driver than opportunities through zoning changes. It's easier to sit in your house year after year as it increases in value than it is to go through a redevelopment process, and have to move or end up with a less impressive residence. I'd guess that many would look for opportunities in denser suburbs elsewhere than agitate to change zoning closer to home. There are strong factors around character of a neighbourhood: I think people in valuable SFHs tend to resent people in units as one example. Housing prices have typically risen without the assistance of zoning changes.
- __turbobrew__ 1y agoProperty taxes are relatively independent from the absolute value of the property. Only the relative value of a property to other properties in municipality determines property taxes.
- jerlam 1y agoI live in California where property tax is fixed at 1% due to Prop 13, so I don't really know how it works anywhere else.
- __turbobrew__ 1y agoOk, I guess that is specific to California. Where I live it doesn’t work that way.
- TJSomething 1y agoIn Nevada, it's a percentage (approximately 0.5%, varying from city to city and with other conditions, like commercial usage) of its assessed value, which is 35% of taxable value. Taxable value is the market value of the bare land plus the replacement cost for all improvements on the land, less depreciation.
- __turbobrew__ 1y agoOk, but if real estate prices half the city can just double the tax from 0.5% to 1%? Correct?
- tomrod 1y agoYes, but every elected official will lose their job at that millage rate increase and you'll have riots.
- __turbobrew__ 1y agoWhy? If the real estate prices half and the municipality doubles the tax rate, everyone pays the same amount of tax in dollars per year?