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> But the bigger problem for housing affordability, he adds, is that "we just haven't built enough [homes] to keep up with the population growth and household f

> But the bigger problem for housing affordability, he adds, is that "we just haven't built enough [homes] to keep up with the population growth and household formation." The circular incentive here is left unsaid. If a house is an investment, you and every other homeowner has an incentive to keep supply low and demand high. This ultimately drives votes, lobbying, and policies that prevent houses being built. Otherwise you end up with falling rents and stagnating property prices, like in Austin. https://www.apartmentlist.com/research/cooling-rent-growth-demonstrates-impact-of-new-supply https://www.apartmentlist.com/research/cooling-rent-growth-d...

crooked-v 1y ago
Housing is only 'an investment' of the kind people expect to get fast returns on because of the shortage of housing. Everyone who benefits from that is effectively extracting wealth from the people who are stuck outside of the housing market because of those shortages.
- lazide 1y ago
  When the line goes up, everyone hopes it keeps going up, and tries to figure out a way to profit from that. One way to stop that, is ensuring the line doesn’t go up. That has some pretty nasty side effects in other ways though. When the line stops or starts to go down, then bad things happen. People can’t sell and move without losing a ton of money. People go bankrupt, etc, etc.
  - Jensson 1y ago
    > When the line stops or starts to go down, then bad things happen Only because many millions bought risky investments since they were told it was basically risk free. Normally things getting cheaper is a good thing, but we tricked people into thinking that housing being expensive is good for them.
    - lazide 1y ago
      This is true literally everywhere, in every country (and under every gov’t) I’ve ever seen. And I’ve seen a lot. If you think US property prices are nuts, look in Europe, Asia (especially East Asia), etc. Most people take crazy risks to buy the most/nicest house they can get a loan for because where you live is a huge factor for a number of other things in people’s lives. If people will give them loans for more than they can afford, many people will still do it. So easy credit? Housing market goes up. Tough credit? Housing market goes down. All things considered anyway. Eventually. Owners have a very, very strong incentive to stop it from going down, so unless they have to move, the market can stay locked up for a long time.
- altruios 1y ago
  'Abolish rent' is a good read. One thing we can do to drive down property prices without driving people out of their homes is to tax the ever-loving-bejebus out of second (or more) Single family homes, for individuals and corporations. Make it progressively worse the more SFM's corporations hold. An example would be to tax a second home and onward at (land tax)^(10nn) where n is the number of total homes you have. The point is to make it financially absurd to own a second home, let alone 20. This is only one particular point on a multi-prong approach. Removing the ability of Private equity to eat up all the local contractors to make a little mini-monopoly is also something that 100% needs to be done. The fastest way to remove 'your home is an investment to be reaped later' mentality is to limit the total sale price based on the last sale price (IE: only increasing the price of actually investment into the property, and legally allowing any sale price far below the estimated property value) which mostly removes all of the incentive of buying a house 'for investment'. That's extreme and would have downstream consequences, we still want to (financially) incentive people to improve their living conditions. It's also extremely hard to build a home! Regulations and zoning laws aside, America lost a fair bit of knowledge after we practically stopped building homes after the 2008 collapse. There's no silver bullet solutions. No company is going to solve the immensely complicated task of building a home in a warehouse to reduce production costs via automation: that's a pipe dream sold to venture capitalists. Any real solution would have consequences that would hurt some folks. Still: doing nothing hurts everyone (except for an extremely small subset of already wealthy individuals and corps) far more. Homes should be for 'living in': not to 'make a living from'.
  - bluGill 1y ago
    That is a bad idea. It assumes the buying a house is something everybody must do. For some buying is a good idea, for some it is not. You have forced people who should rent to buy anyway, or pay massive rent to cover that taxes the investor who owns their house must charge. > Removing the ability of Private equity to eat up all the local contractors to make a little mini-monopoly is also something that 100% needs to be done. There is no need because private equity has not done that, and there is not current reason to think they will. If they ever to get a monopoly then we need to do something about it, but right now there is no sign they are. Plenty of little builders exist who are competitive with the large builders in both price and quality. There are also enough large builders to be competitive even without the small builders.
AlexandrB 1y ago
"Housing as investment" is such a terrible idea, embedding it in culture should be avoided at all costs. Not only does it drive up housing costs, but it has people dumping loads of money into a single investment. Of course people don't want home prices to go down when, for many, it's their primary investment vehicle. I hope we can get to a point where this idea eventually dies. I'm shocked that 2008 didn't wake people up in this regard, but I guess the supply shortage made real estate a pretty rational place to invest for a while.
- bombcar 1y ago
  "Housing is an investment" is just a sales tactic that took over and went insane. It's only really used to justify the humungous loan payments you're willing to take on. I'd happily take a $1 house if it was guaranteed to never change in value; but it also served my needs. It's moderately fun to try to figure out what a "healthy" home market would look like - probably something similar to cars; "used" houses should sell for significantly and noticeably less than "new" ones (all things considered). But location and constraints often invert this - the new houses are so far away that they sell for less than the old ones in more favorable locations. The scary thing is that ONCE you are metrically fuckton in debt, you become exceptionally concerned with the valuations, because once it trends to level or goes under, you're stuck!
  - jameslk 1y ago
    It probably looks somewhat like this: https://psmag.com/economics/inside-japans-disposable-home-market-88133/ https://psmag.com/economics/inside-japans-disposable-home-ma...
  - bluGill 1y ago
    Healthy means the value of a house is the value of the land, plus the value of building a new house exactly like it minus depreciation (meaning if you replace something the value goes up). Builders of course need a reasonable profit so that is factored into the value. The reason why the bay is unhealthy is they don't allow you to put something on the land that matches the value of that land. People who want to spend millions on a house should be getting a mansion not a small house. People who buy a small house should get it on a lot not worth much money. I'm not sure of a good number, but something like only 1/3rd of the value should be the lot, 2/3rd the structure. This is right for most people, but there is nothing wrong with wanting a mansion in an area of tiny houses, or a tiny house on a massive lot if that is how you want to live (if a farm lets count the house separate from the rest of the farm buildings - not that this is possible but ...)
youniverse 1y ago
I would imagine most of the housing being newly built is also on the higher end. This new supply doesn't exactly help affordability!
- criddell 1y ago
  I don't think that's the case. The article specifically mentions multi-family units: > Austin, TX presents the clearest example of this trend. From 2021 to 2023, an average of 9.9 multifamily units were permitted for every 1,000 existing residents in the Austin metro, by far the highest rate among the nation’s 50 largest metros. As these new units have gradually reached completion, the median rent in the Austin metro has fallen by 7.3 percent over the past year, which also ranks first among the top 50 metros.
- bluGill 1y ago
  That depends. Builders build what there is profitable demand for. If there is a lot of demand that means the high priced high end homes are in demand and builders won't build anything else. (unless forced) However there is only finite demand for such things so and as you build eventually someone says "can you make it cheaper" and some builder - having no other customers is forced to build something lower end just to get any work. Now builders won't accept a loss (in general), so that does limit how low end they can go. However the other half of this is that most people moving to something high end just freed up something lower end for someone who can't afford luxury. (most people cannot afford a second home and even those who could afford it want to spend their money on something else. There are also a small number of junk houses that are so worthless they end up destroyed, but this isn't common)
bluGill 1y ago
Most people are investing in houses wrong. If you want to invest as most people think of investments you really need several houses and rent them out. Owning your own home as well makes sense, but your own house is not an investment in the same terms even though it is one of the houses you own! A house falling in value is still a great investment for many, but it is a very different type of investment from what most people mean by investment. By owning a house you have a place to live for the same price even as inflation increases you income. By owning a house you have a place to live after it is paid for when you are retired and have a much smaller income (even if you have more money you have more time to enjoy/spend that money when you are not working 40 hours per week) - retirement savings are limited and houses are a great place to store money that doesn't falling into traditional accounts. These are great things to have long term, but none of them are about the increase in value. The house you live in is an investment in future rent, but you should only think of the value in terms of paying for your nursing home if/when you need one (even then you should have long term care insurance despite all the fraud and near-fraud in this area) The idea that rents fall and property values stagnate is short term thinking. Over any 5 year period is can be true, but over 10+ years inflation tends to catch up. Unless you are buying in a very rural area nobody wants to live in - Austin doesn't qualify. Sure prices will fall, but builders have a lot of fixed costs and so that limits supply and in turn ensures prices will need to go up as population expands, or just the old houses start wearing out (houses last for a long time with maintenance, but eventually) I'm not blindly advocating everybody buy a house. Buying vs renting is a complex question, and many people have proven they can do well in life with both. You need to make your own decisions based on your life situation. If you buy be careful not to think of your house in terms of any other investments you make - it needs very different accounting.
nineplay 1y ago
How do you end housing as an investment?
- jameslk 1y ago
  I don't have an answer to that (I'm sure others do) but I do feel this is a problem that can only make itself worse The more prices go up, the larger % of net worth for an individual a home consumes. If your entire net worth is wound up in your home because your home costs so much, your incentives are much higher to keep the price of your home from falling than if it was just a fraction of your net worth. Worse yet if you're in debt and you have to sell The longer this problem goes on, it seems the harder it will be to rectify
- bluGill 1y ago
  People who are not investing need to vote usefully. Renters typically do not vote in large numbers and so this group that isn't getting anything from the investment isn't getting their needs represented. When renters do vote it is often for things that increase rental costs indirectly. Even those who do own a house are often helped by things that lower value in some way. Many have a kid they want to move out and be successful in life and this means they gain more from lower values then raising values (which is paper money anyway since they would have to sell to see it - most are not). Many want to put an addition on the house and the same laws that prevent building also prevent their addition.
MisterTea 1y ago
> you and every other homeowner has an incentive to keep supply low and demand high. Do you really believe everyone thinks this way? No one I know who owns a home bought it for investment. They bought it so their family has a place to live that is theirs.
- 01HNNWZ0MV43FF 1y ago
  So they wouldn't mind if the resale value drops because other houses get built?
- jameslk 1y ago
  No, I don't think every homeowner thinks that way. But that doesn't change that the incentive is there for every individual, company, and trust that owns homes to keep prices from falling
- bluGill 1y ago
  Enough of them think that way as to matter to politicians. Even if that is a tiny minority, the rest of not given any reason to think they care otherwise and so that "squeaky wheel" gets the power.
- alexjplant 1y ago
  I don't have hard numbers but anecdotally it's a lot of people. If you listen carefully you'll hear a lot of things like "Renting is throwing money away", "I want to get on the property ladder", "buy land because they aren't making any more of it", etc. The American Dream™ centers heavily around home ownership and the government subsidizes it by allowing mortgage interest deductions and underwriting zero-down loans. Getting a mortgage and building equity is the only feasible path to wealth for working-class people who don't have money lying around to invest or the financial literacy to start doing so [1]. Contrast this with reality: in the market I live in it's actually around 20% cheaper to rent on average (presumably because California caps property tax increases). For 30 year mortgages in a sideways market you generally have to make payments for 5 years before you can break even when you sell. On top of that houses are non-fungible, illiquid assets that require maintenance and are subject to black swan events like termites, natural disasters, and destructive tenants that might not be covered by insurance. On a rational basis they are mediocre investments but our culture has conditioned people to think this way because it's their only hope for a nest egg. One might also recall what happened circa 2008 when banks encouraged the house-poor to leverage themselves to the hilt via various home equity loans to the delight of sports car and big screen TV manufacturers. I don't think this is a healthy state of affairs but these are the breaks. [1] I didn't gain a solid understanding of personal finance until after I'd already bought a house with nothing more than several thousand dollars in my checking account - stumbling across Bogleheads via the web saved me.
HPsquared 1y ago
If you're planning on upsizing in future, you still benefit from falling prices.
- immibis 1y ago
  If your home's price fell too much, you likely aren't allowed to sell it because that would force you to repay the difference in your mortgage all at once.
stego-tech 1y ago
This cannot be said enough. If we were remotely serious about addressing the lack of supply, we have multitudes of hard/heavy levers to yank on: * Taxing non-owner-occupied single-family residences at higher rates (incentivizes sales) * Removing or barring the traditional zoning/approvals boards beyond a rubber-stamp for developments that meet safety codes (incentivizes building) * Taxing the capital gains of home sales without ability to roll over (disincentivizes housing as an investment strategy) * Mandating housing as a human right (myriad of knock-on effects for decades after) * Barring no-fault evictions of tenants (helps renters save to buy a home) * National rent control (helps renters save, incentivizes construction since growth must now be achieved through volume, not price hikes) * Public Housing (a la Singapore’s model, where we can place a down payment on a home or condo with a gov-backed loan to the developer, but with restrictions on sales/residency requirements) * Prohibition of algorithmic pricing (flattens rent increases) * Mandating longer leases (to help renters predict housing costs for longer periods) * Allowing renters to “buy” their apartments and convert into a condo (reduces apartment vacancies, allows more renters to build equity and control housing costs) * Price controls on rent increases or sale prices, especially for First-Time Buyers (e.g., 20% margin on a home’s cost for sale by builder but with a gov-backed loan, or restricting rent increases to local COLA or a 20% margin, whichever is lesser) We have so many more options, and nobody wants to try anything because it’ll tank housing values across the board. The longer we wait to pop this metaphorical bubble, the worse it’s going to hurt, for longer.
- bluGill 1y ago
  > Taxing non-owner-occupied single-family residences at higher rates (incentivizes sales) We already do that in the form of homestead tax credit. This just discourages renters though and so I oppose it. If you come up with a way to ensure that if the house is rented the renters pay the lower rate (get a tax rebate?) I'm for it. > Mandating housing as a human right (myriad of knock-on effects for decades after) I have no idea how you do that in practice. There are many choices, but everything I've seen as serious unintended consequences that end up being worse. > National rent control (helps renters save, incentivizes construction since growth must now be achieved through volume, not price hikes) Unintended consequences get you. Every rent control I've seen disincentivizes construction since you can't be sure of a profit.
like_any_other 1y ago
That's why the "Century Initiative", lobbying to increase Canada's population to 100 million by 2100, is funded by real-estate investors: https://en.wikipedia.org/wiki/Century_Initiative#Connections_to_BlackRock https://en.wikipedia.org/wiki/Century_Initiative#Connections...
beepbopboopp 1y ago
It seems like the only solution is going to be an FDR style president that sort of runs up against traditional liberties in order to to build. I do wonder if an interesting quirk of the current president essentially consolidated executive power for questionable reasons, leads to a candidate that uses some of those changes to bulldoze these types of projects back into America.

crooked-v 1y ago

Housing is only 'an investment' of the kind people expect to get fast returns on because of the shortage of housing. Everyone who benefits from that is effectively extracting wealth from the people who are stuck outside of the housing market because of those shortages.

lazide 1y ago
When the line goes up, everyone hopes it keeps going up, and tries to figure out a way to profit from that. One way to stop that, is ensuring the line doesn’t go up. That has some pretty nasty side effects in other ways though. When the line stops or starts to go down, then bad things happen. People can’t sell and move without losing a ton of money. People go bankrupt, etc, etc.
- Jensson 1y ago
  > When the line stops or starts to go down, then bad things happen Only because many millions bought risky investments since they were told it was basically risk free. Normally things getting cheaper is a good thing, but we tricked people into thinking that housing being expensive is good for them.
  - lazide 1y ago
    This is true literally everywhere, in every country (and under every gov’t) I’ve ever seen. And I’ve seen a lot. If you think US property prices are nuts, look in Europe, Asia (especially East Asia), etc. Most people take crazy risks to buy the most/nicest house they can get a loan for because where you live is a huge factor for a number of other things in people’s lives. If people will give them loans for more than they can afford, many people will still do it. So easy credit? Housing market goes up. Tough credit? Housing market goes down. All things considered anyway. Eventually. Owners have a very, very strong incentive to stop it from going down, so unless they have to move, the market can stay locked up for a long time.
altruios 1y ago
'Abolish rent' is a good read. One thing we can do to drive down property prices without driving people out of their homes is to tax the ever-loving-bejebus out of second (or more) Single family homes, for individuals and corporations. Make it progressively worse the more SFM's corporations hold. An example would be to tax a second home and onward at (land tax)^(10nn) where n is the number of total homes you have. The point is to make it financially absurd to own a second home, let alone 20. This is only one particular point on a multi-prong approach. Removing the ability of Private equity to eat up all the local contractors to make a little mini-monopoly is also something that 100% needs to be done. The fastest way to remove 'your home is an investment to be reaped later' mentality is to limit the total sale price based on the last sale price (IE: only increasing the price of actually investment into the property, and legally allowing any sale price far below the estimated property value) which mostly removes all of the incentive of buying a house 'for investment'. That's extreme and would have downstream consequences, we still want to (financially) incentive people to improve their living conditions. It's also extremely hard to build a home! Regulations and zoning laws aside, America lost a fair bit of knowledge after we practically stopped building homes after the 2008 collapse. There's no silver bullet solutions. No company is going to solve the immensely complicated task of building a home in a warehouse to reduce production costs via automation: that's a pipe dream sold to venture capitalists. Any real solution would have consequences that would hurt some folks. Still: doing nothing hurts everyone (except for an extremely small subset of already wealthy individuals and corps) far more. Homes should be for 'living in': not to 'make a living from'.
- bluGill 1y ago
  That is a bad idea. It assumes the buying a house is something everybody must do. For some buying is a good idea, for some it is not. You have forced people who should rent to buy anyway, or pay massive rent to cover that taxes the investor who owns their house must charge. > Removing the ability of Private equity to eat up all the local contractors to make a little mini-monopoly is also something that 100% needs to be done. There is no need because private equity has not done that, and there is not current reason to think they will. If they ever to get a monopoly then we need to do something about it, but right now there is no sign they are. Plenty of little builders exist who are competitive with the large builders in both price and quality. There are also enough large builders to be competitive even without the small builders.

AlexandrB 1y ago

"Housing as investment" is such a terrible idea, embedding it in culture should be avoided at all costs. Not only does it drive up housing costs, but it has people dumping loads of money into a single investment. Of course people don't want home prices to go down when, for many, it's their primary investment vehicle. I hope we can get to a point where this idea eventually dies. I'm shocked that 2008 didn't wake people up in this regard, but I guess the supply shortage made real estate a pretty rational place to invest for a while.

bombcar 1y ago
"Housing is an investment" is just a sales tactic that took over and went insane. It's only really used to justify the humungous loan payments you're willing to take on. I'd happily take a $1 house if it was guaranteed to never change in value; but it also served my needs. It's moderately fun to try to figure out what a "healthy" home market would look like - probably something similar to cars; "used" houses should sell for significantly and noticeably less than "new" ones (all things considered). But location and constraints often invert this - the new houses are so far away that they sell for less than the old ones in more favorable locations. The scary thing is that ONCE you are metrically fuckton in debt, you become exceptionally concerned with the valuations, because once it trends to level or goes under, you're stuck!
- jameslk 1y ago
  It probably looks somewhat like this: https://psmag.com/economics/inside-japans-disposable-home-market-88133/ https://psmag.com/economics/inside-japans-disposable-home-ma...
- bluGill 1y ago
  Healthy means the value of a house is the value of the land, plus the value of building a new house exactly like it minus depreciation (meaning if you replace something the value goes up). Builders of course need a reasonable profit so that is factored into the value. The reason why the bay is unhealthy is they don't allow you to put something on the land that matches the value of that land. People who want to spend millions on a house should be getting a mansion not a small house. People who buy a small house should get it on a lot not worth much money. I'm not sure of a good number, but something like only 1/3rd of the value should be the lot, 2/3rd the structure. This is right for most people, but there is nothing wrong with wanting a mansion in an area of tiny houses, or a tiny house on a massive lot if that is how you want to live (if a farm lets count the house separate from the rest of the farm buildings - not that this is possible but ...)

youniverse 1y ago

I would imagine most of the housing being newly built is also on the higher end. This new supply doesn't exactly help affordability!

criddell 1y ago
I don't think that's the case. The article specifically mentions multi-family units: > Austin, TX presents the clearest example of this trend. From 2021 to 2023, an average of 9.9 multifamily units were permitted for every 1,000 existing residents in the Austin metro, by far the highest rate among the nation’s 50 largest metros. As these new units have gradually reached completion, the median rent in the Austin metro has fallen by 7.3 percent over the past year, which also ranks first among the top 50 metros.
bluGill 1y ago
That depends. Builders build what there is profitable demand for. If there is a lot of demand that means the high priced high end homes are in demand and builders won't build anything else. (unless forced) However there is only finite demand for such things so and as you build eventually someone says "can you make it cheaper" and some builder - having no other customers is forced to build something lower end just to get any work. Now builders won't accept a loss (in general), so that does limit how low end they can go. However the other half of this is that most people moving to something high end just freed up something lower end for someone who can't afford luxury. (most people cannot afford a second home and even those who could afford it want to spend their money on something else. There are also a small number of junk houses that are so worthless they end up destroyed, but this isn't common)

bluGill 1y ago

Most people are investing in houses wrong. If you want to invest as most people think of investments you really need several houses and rent them out. Owning your own home as well makes sense, but your own house is not an investment in the same terms even though it is one of the houses you own! A house falling in value is still a great investment for many, but it is a very different type of investment from what most people mean by investment. By owning a house you have a place to live for the same price even as inflation increases you income. By owning a house you have a place to live after it is paid for when you are retired and have a much smaller income (even if you have more money you have more time to enjoy/spend that money when you are not working 40 hours per week) - retirement savings are limited and houses are a great place to store money that doesn't falling into traditional accounts. These are great things to have long term, but none of them are about the increase in value. The house you live in is an investment in future rent, but you should only think of the value in terms of paying for your nursing home if/when you need one (even then you should have long term care insurance despite all the fraud and near-fraud in this area) The idea that rents fall and property values stagnate is short term thinking. Over any 5 year period is can be true, but over 10+ years inflation tends to catch up. Unless you are buying in a very rural area nobody wants to live in - Austin doesn't qualify. Sure prices will fall, but builders have a lot of fixed costs and so that limits supply and in turn ensures prices will need to go up as population expands, or just the old houses start wearing out (houses last for a long time with maintenance, but eventually) I'm not blindly advocating everybody buy a house. Buying vs renting is a complex question, and many people have proven they can do well in life with both. You need to make your own decisions based on your life situation. If you buy be careful not to think of your house in terms of any other investments you make - it needs very different accounting.

nineplay 1y ago

How do you end housing as an investment?

jameslk 1y ago
I don't have an answer to that (I'm sure others do) but I do feel this is a problem that can only make itself worse The more prices go up, the larger % of net worth for an individual a home consumes. If your entire net worth is wound up in your home because your home costs so much, your incentives are much higher to keep the price of your home from falling than if it was just a fraction of your net worth. Worse yet if you're in debt and you have to sell The longer this problem goes on, it seems the harder it will be to rectify
bluGill 1y ago
People who are not investing need to vote usefully. Renters typically do not vote in large numbers and so this group that isn't getting anything from the investment isn't getting their needs represented. When renters do vote it is often for things that increase rental costs indirectly. Even those who do own a house are often helped by things that lower value in some way. Many have a kid they want to move out and be successful in life and this means they gain more from lower values then raising values (which is paper money anyway since they would have to sell to see it - most are not). Many want to put an addition on the house and the same laws that prevent building also prevent their addition.

MisterTea 1y ago

> you and every other homeowner has an incentive to keep supply low and demand high. Do you really believe everyone thinks this way? No one I know who owns a home bought it for investment. They bought it so their family has a place to live that is theirs.

01HNNWZ0MV43FF 1y ago
So they wouldn't mind if the resale value drops because other houses get built?
jameslk 1y ago
No, I don't think every homeowner thinks that way. But that doesn't change that the incentive is there for every individual, company, and trust that owns homes to keep prices from falling
bluGill 1y ago
Enough of them think that way as to matter to politicians. Even if that is a tiny minority, the rest of not given any reason to think they care otherwise and so that "squeaky wheel" gets the power.
alexjplant 1y ago
I don't have hard numbers but anecdotally it's a lot of people. If you listen carefully you'll hear a lot of things like "Renting is throwing money away", "I want to get on the property ladder", "buy land because they aren't making any more of it", etc. The American Dream™ centers heavily around home ownership and the government subsidizes it by allowing mortgage interest deductions and underwriting zero-down loans. Getting a mortgage and building equity is the only feasible path to wealth for working-class people who don't have money lying around to invest or the financial literacy to start doing so [1]. Contrast this with reality: in the market I live in it's actually around 20% cheaper to rent on average (presumably because California caps property tax increases). For 30 year mortgages in a sideways market you generally have to make payments for 5 years before you can break even when you sell. On top of that houses are non-fungible, illiquid assets that require maintenance and are subject to black swan events like termites, natural disasters, and destructive tenants that might not be covered by insurance. On a rational basis they are mediocre investments but our culture has conditioned people to think this way because it's their only hope for a nest egg. One might also recall what happened circa 2008 when banks encouraged the house-poor to leverage themselves to the hilt via various home equity loans to the delight of sports car and big screen TV manufacturers. I don't think this is a healthy state of affairs but these are the breaks. [1] I didn't gain a solid understanding of personal finance until after I'd already bought a house with nothing more than several thousand dollars in my checking account - stumbling across Bogleheads via the web saved me.

HPsquared 1y ago

If you're planning on upsizing in future, you still benefit from falling prices.

immibis 1y ago
If your home's price fell too much, you likely aren't allowed to sell it because that would force you to repay the difference in your mortgage all at once.

stego-tech 1y ago

This cannot be said enough. If we were remotely serious about addressing the lack of supply, we have multitudes of hard/heavy levers to yank on: * Taxing non-owner-occupied single-family residences at higher rates (incentivizes sales) * Removing or barring the traditional zoning/approvals boards beyond a rubber-stamp for developments that meet safety codes (incentivizes building) * Taxing the capital gains of home sales without ability to roll over (disincentivizes housing as an investment strategy) * Mandating housing as a human right (myriad of knock-on effects for decades after) * Barring no-fault evictions of tenants (helps renters save to buy a home) * National rent control (helps renters save, incentivizes construction since growth must now be achieved through volume, not price hikes) * Public Housing (a la Singapore’s model, where we can place a down payment on a home or condo with a gov-backed loan to the developer, but with restrictions on sales/residency requirements) * Prohibition of algorithmic pricing (flattens rent increases) * Mandating longer leases (to help renters predict housing costs for longer periods) * Allowing renters to “buy” their apartments and convert into a condo (reduces apartment vacancies, allows more renters to build equity and control housing costs) * Price controls on rent increases or sale prices, especially for First-Time Buyers (e.g., 20% margin on a home’s cost for sale by builder but with a gov-backed loan, or restricting rent increases to local COLA or a 20% margin, whichever is lesser) We have so many more options, and nobody wants to try anything because it’ll tank housing values across the board. The longer we wait to pop this metaphorical bubble, the worse it’s going to hurt, for longer.

bluGill 1y ago
> Taxing non-owner-occupied single-family residences at higher rates (incentivizes sales) We already do that in the form of homestead tax credit. This just discourages renters though and so I oppose it. If you come up with a way to ensure that if the house is rented the renters pay the lower rate (get a tax rebate?) I'm for it. > Mandating housing as a human right (myriad of knock-on effects for decades after) I have no idea how you do that in practice. There are many choices, but everything I've seen as serious unintended consequences that end up being worse. > National rent control (helps renters save, incentivizes construction since growth must now be achieved through volume, not price hikes) Unintended consequences get you. Every rent control I've seen disincentivizes construction since you can't be sure of a profit.

like_any_other 1y ago

That's why the "Century Initiative", lobbying to increase Canada's population to 100 million by 2100, is funded by real-estate investors: https://en.wikipedia.org/wiki/Century_Initiative#Connections_to_BlackRock https://en.wikipedia.org/wiki/Century_Initiative#Connections...

beepbopboopp 1y ago

It seems like the only solution is going to be an FDR style president that sort of runs up against traditional liberties in order to to build. I do wonder if an interesting quirk of the current president essentially consolidated executive power for questionable reasons, leads to a candidate that uses some of those changes to bulldoze these types of projects back into America.