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But people who only own 1 house at most are still disadvantaged by this - sure, the value of their apt goes up, but if they want to switch to a larger house, th
by torginus 7mo ago
But people who only own 1 house at most are still disadvantaged by this - sure, the value of their apt goes up, but if they want to switch to a larger house, the difference they're paying also increases, so do the property and wealth taxes, if applicable.
There are many stories of solidly low-to-middle class families who lived in an area where property prices soared, and had to choose between bankruptcy or moving out, because they could no longer.
The only people who benefit from this are the investors and landlords. So allowing housing prices to surge is literally taxing the poor for the benefit of the rich.
Buildings also deteroriate - ask a civil engineer. Building something that lasts 50-100 years is much cheaper than something that can be maintained economically indefinitely. If you own a house with copper or PVC plumbing, that they go bad after 40-50 years, and fixing burst pipes quickly gets expensive.
Why do countries allow housing prices to rise then? Simple, it allows banks to have a massive portfolio of loans, where they get a steady source of income for literally decades, while also getting a massive portfolio of real estate they can use as basis for leverage to grant loans (which they profit off of).
Governments can then tax the banks and get some of that money without the dreaded specter of increasing income taxes.
The only problem is that the everyman gets stuck with a 10,25, and now 50 year old loan (with a similar increase in price) for the very same median house.
- lenwood 7mo ago> So allowing housing prices to surge is literally taxing the poor for the benefit of the rich. How do we limit home prices increasing? I see your point but solving this isn't trivial.
- exabrial 7mo agoBuild more housing
- testing22321 7mo agoIf investment companies that already own tens of thousands of homes buy them and keep increasing the rent, the problem has not been solved.
- brazzy 7mo agoExcept they cannot increase rents when there is enough supply for a market to actually work.
- testing22321 7mo agoThe market will remain irrational longer than… Of course they can when they own them all. See De Beers diamonds. Buy them all, keep the price artificially high.
- larsiusprime 7mo agoDiamond prices are famously crashing now due to artificial lab made diamonds (increased supply)
- nroets 7mo agoThe De Beers cartel was able to avoid anti trust scrutiny because the best reserves are outside (Africa/Canada/Russia) of the most lucrative markets (US/Europe/Asia). Corporations control only a small faction of housing supply.
- matkoniecz 7mo agoInsanely stupid restrictions on residential construction make it easier.
- exabrial 7mo agoThey can only do that (own them all) with government assistance. See De Beers diamonds, who leveraged the legal system to create a monopoly. The solution is to build more housing and get the government out of the picture.
- idbnstra 7mo agoland value tax would fix this
- exabrial 7mo ago
- testing22321 7mo agoHousing can not be both affordable and a good investment. If we want housing to be affordable ie “limit them increasing” we have to stop people using them as investments. There are many ways. My favourites are: - one human can own one residential property. No companies or businesses can. -or, property tax doubles (or 10x) with every residential property owned. - no foreign ownership (Canada does this now) - government can own and rent residential property at no profit. They supply plenty of other basic necessities of life, why not houses?
- brazzy 7mo ago> one human can own one residential property. No companies or businesses can. So, in other words, you want everyone who cannot afford to outright buy a house to be homeless?
- FuriouslyAdrift 7mo agoThis is what apartments are for...
- testing22321 7mo agoNot at all. The government should step on and rent them as rent to own systems. Make no profit
- bombcar 7mo agoIt can be both affordable and an investment - it cannot (and will not) perpetually be a market-beating top-tier investment. All of the items above can have drastic unintended consequences; the way to keep prices affordable is to make sure that supply is always outstripping demand by a bit. Some examples of unintended consequences: * I can't add an ADU to my existing property which would add one more dwelling unit * Subdivision of property is discouraged; combining parcels reduces tax even if no new dwelling units are created * This might be the closest to doing something though it could substantially discourage non-citizen immigrants (legal or not) * This has been tried before and had well-documented issues, but might be doable if they can provide a "floor"
- torginus 7mo agoThere are a bunch of successful models, people usually mention Vienna as having a particularly effective housing policy - what they did is the city bought up a bunch of land, and built housing on top of it in various government subsidy programs, from non-profit public benefit corporations, to social housing for the poor. They have strong renters rights, protections against rent increases, and high standards to which dwellings must conform to. So while you can be a landlord in Vienna, you have to compete with affordable housing options, and you're forced to maintain a high quality yourself. So that means that unless you can offer something the market's willing to pay extra for, being a landlord is not particularly lucrative thing. Notice nowhere in my post did I mention the typical 'landlords are evil and must be taxed to death' approach. Which is in stark contrast to most places where you're paying through the nose, the standard of rented dwellings is low and your rent can be increased or you can be kicked out on moments notice.
- deleted 7mo ago[deleted]
- WalterBright 7mo ago> Why do countries allow housing prices to rise then? Because if you forcibly keep housing prices low, you have a shortage.