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Comment by ptero | Hacker News Reader

Just a personal observation / data point as a lot of folks everywhere are saying "put bankers in prison" any time they recall 2008 crisis. This is from the US, no idea how things played out in other countries:

Government shares a significant portion of the blame for this crisis. It required raising affordability of homes (i.e., loans) for lower income families. They might as well legislate away entropy, friction or gravity. Banks cannot lower home selling prices, so instead they had to become "creative" with loans, for example lend at 0% for the first 5 years. And lend more than today's purchase price (creating strong demand for inflated assessments) so some of that extra cash can be used to pay mortgage for a few years. Five years later the music stops unless you can refinance again and kick that can down the road.

This insane game of musical chairs, where banks generate toxic loans, securitize them and throw them at someone else, had to end in tears. Everyone understood this. But faced with the regulation to raise affordability, what exactly should the lenders have done? They HAD to use at least X% of new loans to low income families.

Sadly, this is yet another case of good intentions (helping lower income families) implemented as a clumsy regulation that ends up hurting people you wanted to help. My 2c.

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You’re forgetting that the fact that many ignored the law and their own banks policies, driven internally to give out more loans (to anyone, not just the poor), and then mislabeled the risk when repackaging and selling these to others.

https://www.housingwire.com/articles/46335-wells-fargo-to-pa...

I’d recommend watching this bbc documentary that gives a wider perspective on “risk”: https://topdocumentaryfilms.com/all-watched-over-by-machines...

the increase in mortgage originations was shared across the whole distribution of borrowers, and that middle- and high-income borrowers made up the majority of originations even at the peak of the boom. Compared to prior years, middle- and high-income borrowers (not the poor), as well as those with medium and high credit scores, made up a much larger share of delinquencies in the crisis relative to earlier years.

http://www.nber.org/papers/w20848

Once the framework was in place to give out garbage loans, people across all income levels leveraged the opportunity to get houses they shouldn't have.

This just shows how poisonous it is when the government screws up a market by essentially mandating that banks throw away their normal risk assessment process.

What law did the government pass that forced the banks to ignore their risk assessment processes? Particularly, supposing you can point to some law or intervention, why do you suppose the banks are so childish and naive that when a law forces them to do one thing they don't want to do (make dumb loans to low-income groups), they'll respond by over-generalising and doing a whole other bunch of things they hadn't up to that point wanted to do (make dumb loans to middle- and high-income groups).

Amazingly there wasn't even a requirement for basic income checks when issuing a mortgage - that came after the crisis.

If we look at the mortgage pipeline, the problems become obvious, but none of them have to do with the government, except in that the government should have regulated.

Start with the mortgage origination companies like Countrywide who could easily offload mortgages to the other banks to collateralize. Since these companies could completely offload their risk, they were highly incentivized to give a mortgage to everyone.

Move on to the rating companies and the big banks creating financial products of doom and you've got the whole mess. All without the government "creating the problem." I do agree, however, that the government giving these companies an implied put option via a bailout gave them every reason they needed to take huge risks.

Still amazes me that no one from the banks ended up in jail.

Exactly. The bankers that did this are still adults, and are still fully capable of taking responsibility for their actions. No one told them they had to make garbage loans.

I guess the following would be a good starting point of discussion: https://www.forbes.com/sites/norbertmichel/2015/01/26/govern...

It's really not. First of all, the affordable housing market isn't where the housing market was most inflated so the author's entire premise is wrong.

Secondly, the author of that article is pretty clearly shilling to privatize Fannie Mae.

Thirdly, nobody here seems to understand what the community lending standards actually were and just wants to use it as a post to rest their argument on.

This is a much better, though still critical of the CRA article that goes into actual detail on what the problems were: https://www.city-journal.org/html/financial-crisis-and-cra-1...

But it's still an overly reductive and misguided argument. As Noah Smith points out here: https://noahpinionblog.blogspot.com/2012/12/did-risky-mortga...

What government interventions caused the doubling of subprime lending from 2004 to 2006?

FDIC insurance. A private insurance market for bank accounts sends a price signal about reliability. Subsidizing that insurance in a way that doesn't eliminate the price signal and the customer risk, like requiring 20% private insurance for 90% of the account face value and the govt providing the remaining 80% insurance at the same price or at a discount, could make sense if insuring more accounts was a policy goal. Having the government ensure everything for free with no internal price differentiation just tells banks they might as well go wild.

FDIC only ensures bank deposits, such as checking or savings accounts, not mortgages. It's not at all clear what that has to do with the proliferation of subprime lending.

It's a root cause of bank irresponsibility. If not for free FDIC insurance, a bank making risky loans would cause the cost of insuring an account at that bank to rise. Securitization does change this, but all the CDSs on AIG's mispriced insurance on CDOs were ultimately taking place against a background of too-big-to-fail and flat-priced government insurance.

Why would a bank spend any money on insurance to cover accounts in the event that they run out of money? That's just the end of the bank, they don't care at that point. It's not like the executive officers would have a chance of going to jail over it.

What laws did the government pass which "screwed up" the market?

Don't forget another thing the government did: previous bailouts. When large banks were told they were "too big to fail", they heard "your risks will be subsidized by taxpayers", so of course they took on more risk. We should have let the banks fail, if they really were going to.

Another thing: monetary policy causing business cycles, or making them much worse. The recent money-printing by the fed is super scary to me, because it created a new bubble in the stock market.

> Don't forget another thing the government did: previous bailouts. When large banks were told they were "too big to fail", they heard "your risks will be subsidized by taxpayers", so of course they took on more risk. We should have let the banks fail, if they really were going to.

Why couldn't the stockholders get wiped out when a TBTF bank gets bailed out?

To me, that seems like a fair compromise that protects the economy but still punished excessive risk taking.

Bear Stearns and Washington Mutual shareholders got wiped out. I know this because I lost tens of thousands of dollars, unfortunately.

AIG stock declined something like 98%, which isn't great either.

You don't need to bail out banks to protect the economy.

There’s no law of nature that says this is always required, no. But I’m afraid in the situation the Fed found itself in back in 2008, there really was no other option without a much, much more severe recession. Governments had been massively over spending and actively promoting reckless lending, even legally mandating it in some cases with required ratios of low grade mortgages, for years.

I personally know two people that cashed out tens of thousands of pounds here in the UK by remortgaging and spent it. Plenty of consumers were behaving ridiculously recklessly too. It was a crazy time, and businesses need banks. People need banks. Should your bank holding you accounts and mortgage have been allowed to fail? How about the bank financing your employer? How about both at the same time?

Yes, you do. If they are by definition too big to fail, then them shutting down could cause runs on banks. When people's confidence in banks crashes, then very bad things happen to our financial system which is predicated on the idea of people keeping their money in banks and bank accounts.

Even people pulling their money out of money market mutual funds almost caused a collapse of the monetary system, which is why the Fed had to secure those.

Instead of bailing out the banks, they could easily have simply been put in receivership, with Treasury as the recevier in control. Simply re-capitalize them from the federal reserve, and they don't have to miss a single hour's worth of operation.

Unwinding the mess of CDOs, etc. would have been long and tiresome but, with a little help from a convenient executive order or two perfectly do-able.

Because there's no law allowing that currently, and Constitutionally you can't just make it up after the fact

Sure, there were plenty of laws allowing that. Bankruptcies happen every day, with plenty of legal framework. The depositors were all protected by FDIC.

> "too big to fail"

I guess we're doomed to repeat history, since this was upheld again in 2008.

Not entirely true. We let one of the massive banks fail. Lehman brothers is no more...

There was an attempt to impose regulation on banks that qualify for this designation, with some (limited) success. Republicans have mostly dismantled it by this point though.

I think this began earlier with the S&L scandal decades(?) earlier. Some fave saving but not much happened to the guilty parties... A sad state of affairs.

What about the people that didn't have good intentions?

How do you feel about Lehman's Repo 105 maneuver where they intentionally used a Tobashi scheme to hide their losses from their investors?

The state of New York went after Ernst and Young on fraud charges for helping facilitate the scam and E&Y ended up paying a $10mil fine.

Is this justice? It doesn't feel like it.

Lehman went bankrupt. It seems they got precisely what they deserved.

If the only problem were the bad actors it wouldn't have been a systemic collapse.

A company going bankrupt does not mean any decision makers were negatively influenced enough to not repeat the actions. I doubt THEY went bankrupt.

I don't know enough to say if your conclusion is true or false, but I dont follow your logic. Why can't bad actors, if they are pervasive, cause a systemic collapse? From what I heard, incomes were fabricated, risks downplayed, and policies ignored. The insurance against the risk was priced on false premises. How can these bad acts (by bad actors) not cause a risk of systemic collapse?

I never understood why Dick Fuld wasn't put in jail. He deliberately misled investors on the amount of leverage they were operating under. I thought Sarbox, which required the CEO and CFO to sign off on their public financial statements, would have caught this.

Nah you’re throwing the baby out with the bath water.

Poor people can’t afford homes and in many cases don’t have proper identification even to buy a home. That’s where the whole NINJA subprime thing came in.

But the actual problem was that those loans were being rated AAA when repackaged into a CDO.

From that point forward is where the problem began. Tha is, if they were properly rated ‘08 would not have happened.

The swaps and derivatives that nearly brought down AIG then took that bug in the system(the bad improperly rated mortgages repacackaged is high quality shit) and nearly collapsed the world economy.

There’s nothing wrong with helping poor people buy homes but don’t call those mortgages AAA otherwise you’re basically operating under false information from there on out and should expect unpredictable results.

I agree completely with you, but I remember during the crisis that a large part of the outrage was directed at banks "taking advantage" of the poor by lending them sums that they couldn't hope to pay back.

I can remember a couple years later trying to buy a house and being surprised that the formula for loan size was so concrete. They didn't care what you actually spent your money on, just that your payments be no larger than 30% of your income. Because we're frugal, we could have afforded quite a bit more house than they were willing to lend to us for. Indeed, we paid way more in rent than we could get for a monthly mortgage payment. We ended up wishing that the banks had tried to "take advantage" of us because that would have meant giving us more latitude to manage our own affairs.

>But the actual problem was that those loans were being rated AAA when repackaged into a CDO.

I was under the impression that the CDO as a whole was being rated well - and the junk loans still maintained their rating when they were packaged. In other words, both parties were aware that the highly rated CDO contained bad loans. Is this not the case?

The junk stuff was repackaged many times over and sold as separate financial products. That was where the whole rocket scientist quant bs came in as it required made-up math to make it work. So it was re-rated from crap to AAA. And then AIG started offering insurance against those products and things really started heating up.

So it took taking some good bonds and some bad bonds and throwing them into the same CDO to get a good rating.

>Government shares a significant portion of the blame for this crisis.

Agreed, I think the sheer size of the crisis relates back to deliberate policies to support sub-prime lending. The idea was to help people to afford homes even though they would not normally be considered a good risk.

But opening this up created a vast new market, like adding a wider bottom tier to an already giant pyramid. Along with the vast size came even higher risk, since all these people would be more liable to default if the economy tanked.

Even still because we are accepting more sub-prime liability, it goes beyond poor people to others with better incomes but are buying into a more expensive neighborhood. Now people of all incomes are getting sub-prime loans, and this feed into rising housing prices.

This talking point has been debunked for years. It's a special favorite of Barry Ritholtz at 'The Big Picture' blog. He observes, empirically, that most sub-prime lending during the crisis was done by banks that weren't required to do so.

EDIT: To substantiate and cite, "Nearly $3 of every $4 in subprime loans made from 2004 through 2007 came from lenders who were exempt from the law (CRA)." [0]

[0] http://ritholtz.com/2009/06/most-subprime-lenders-werent-cov...

This was a vast potential market and Fannie Mae proved you could get away with serving it, the sky didn't fall for a number of years.

So other banks jumped on board. Are you saying they would have taken on this risk if the federal government hadn't moved first? I think there is a clear cause and affect.

If they'd taken the same risks that Fannie and Freddie took, they'd have had similar results, and the market may well have gone on functioning as it had before. "Similarly, the total credit losses incurred by the GSEs are about one-fourth those incurred about by private label mortgage securitizations, which are packaged and sold by Wall Street." [0]

The private banks took greater risks and wound up with worse performance.

[0] http://ritholtz.com/2013/03/the-big-lie-annotated-an-aei-his...

You, along with very many other people, are assuming the banks were convinced by the government to do something they didn't want to do. You mustn't forget that giving loans to people you know won't be able to pay them back, and lying about their ability to do so, is an absolutely classic form of fraud. Bankers lie their asses off, make big bucks in bonuses, and their banks in the long run are fucked, or not (perhaps the taxpayer will bear the burden). The disgustingly simple explanation is that bonus money doesn't get clawed back. If these poor little bankers were getting bullied by the government into doing something against their interests, why the hell did they lie their asses off about their borrowers' financial prospects. Why wouldn't they say, 'sorry guv, you gotta look at these numbers, the black and brown folk coming to us for house loans simply aren't viable'

It was Fannie Mae, the large semi-government housing lender, that was strong-armed into supporting sub-prime lending in a big way. Again for good reasons. This normalized sub-prime lending for others.

Not everything has an evil agenda behind it. Sometimes the reasons are fairly ordinary and boring.

Citation?

In saying that the government shares the blame you overlook the fact that it was a cabal across both banks and government, separated only by a revolving door, that both created then coordinated the response to the crisis. Allocation of blame in this scenario is difficult.

It also drove house prices crazy, a process that continues to this day and has ironically made housing permanently unaffordable for huge numbers of people. The housing bubble created a "new normal" for house prices that's frankly absurd when considered as a fraction of median income.

It's very similar to the story with student loans. Easy student loans have driven tuition costs as crazy as housing costs.

A similar thing is happening with auto loans. There's a ton of bad car debt out there, and easy credit has inflated car prices and (I believe) helped disincentivize auto makers from building cars that are actually affordable. There's no market for simple and cheap if you can get something nicer on credit and not look poor.

There's a reason the Dodge Journey retails for 4k+ off msrp. With the inflated mspr they can get the bank to write a bigger loan. That way you can buy a journey at a "discount" with room to roll your existing bad loan into a new, even worse one.

To be fair though, safety regulations requiring heavier vehicles on top of requirements for better fuel economies have cut the margins a bit, but the prices have not raised much if at all. The 1995 Honda Civic LX was $14,160 in MSRP, which is ~$22k in 2018 dollars. There are plenty of vehicles for less than that.

You might be referring to the higher margins that SUVs get, which are getting more and more popular in the US... but TBH I'm not sure where you get the idea that car prices have been inflated.

This got me to dig into historical prices a little, and turns out I was even more wrong than that. Looks like car prices were pegged to inflation until about 1997, where they level off while overall CPI keeps growing:

https://fred.stlouisfed.org/series/CPIAUCNS

https://fred.stlouisfed.org/series/CUUR0000SETA01?utm_source...

That said, loan terms are lengthening and subprime loans are a large and growing part of the market. That has to be buttressing prices. I really can't back this up, but my suspicion is that over the long term, available credit has helped discourage auto makers from simply making cheaper cars.

Today you can buy a cheap appliance computer for a price that would've been unimaginable in 1995. And you can buy a cheap appliance car... for about the same price as in 1995. Obviously the two markets don't work the same way, but there's still something odd about that.

Wasn't this a predicted result of offering cheap loans? And if so,why was this the route chosen?

Americans (even some center-left ones) hate the idea of directly supporting anything, so cheap loans were used as a substitute for directly operating and funding public colleges. Same with housing.

Directly supporting people is "socialism," a handout, and is seen as supporting laziness and vice. A loan must be paid back, which allows many Americans to view it as something encouraging responsibility and virtue. It all comes down to the puritan work ethic.

The problem is that government backed loans are just an indirect way of giving welfare, and a monstrously perverse and inefficient way to boot. It drives price inflation which gets captured by the vendors of the products/services in question (existing home owners, builders, universities, etc.) instead of those you're trying to help and it creates debt bubbles that represent a danger to the overall health of the economy.

Overall it's probably worse than doing nothing due to the price inflation it generates. Housing was reasonable across much of the USA prior to the 'oughts. The housing bubble destroyed home affordability, an effect which as I said persists to this day.

Wouldn't directly supporting people also produce price inflation?

Yep, what the parent commenter didn't say was that pumping money into any system almost always results in prices going wayyy up to absorb the new demand. This happens regardless or whether it's loans or direct subsidies.

I believe the way laws generally deal with this is to only allow subsidies when the price is under some cap. Sadly we (or the US) don't do this for education it would seem

What was the vehicle by which US gov't 'required raising affordability of homes'?

Yeah, I want to know that, also. My understanding is that anything explicitly backed by the government (Fannie Mae) was your standard 30-year mortgage with the normal requirements. The interest-only loans, variable-rate loans, etc. were all originated through the brokers like Countrywide and packaged/sold as securities.

"In 2006, Fannie and Freddie insured 70% of all subprime loans so they needed to keep these loans viable"

https://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae...

Are you having us all on? The only citation for the claim you are highlighting comes from a mcclatchley article titled "Private sector loans, not Fannie or Freddie, triggered crisis" (https://www.mcclatchydc.com/news/politics-government/article...) whose thesis is the EXACT OPPOSITE of what you've been arguing in this thread

> As the economy worsens and Election Day approaches, a conservative campaign that blames the global financial crisis on a government push to make housing more affordable to lower-class Americans has taken off on talk radio and e-mail.

> Commentators say that's what triggered the stock market meltdown and the freeze on credit. They've specifically targeted the mortgage finance giants Fannie Mae and Freddie Mac, which the federal government seized on Sept. 6, contending that lending to poor and minority Americans caused Fannie's and Freddie's financial problems.

> Federal housing data reveal that the charges aren't true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.

Furthermore:

> Federal Reserve Board data show that:

> More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions. Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year. Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.

FURTHERMORE

> But these loans, and those to low- and moderate-income families represent a small portion of overall lending....Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent...During those same explosive three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market.

And then we get to the only 70% in the article:

> fueled demand for mortgage-backed securities, the technical term for mortgages that are sold to a company, usually an investment bank, which then pools and sells them into the secondary mortgage market. About 70 percent of all U.S. mortgages are in this secondary mortgage market, according to the Federal Reserve.

I mean what the hell is going on here? You link to a wikipedia quote which points to an article methodically dismantaling the case you are making, which flatly contradicts the wikipedian citing the article, and whose only connection to your comment is that they both have a "70%" in them, though referring to different things (secondary market dominated by investment banks VS fannie and freddie, NOT THE SAME THING)

> in 2006 that led to Fannie and Freddie losing even more market share in the booming subprime market...mortgage brokers, who also weren't subject to federal regulation or the CRA, originated most of the subprime loans... only one-third of all CRA loans had interest rates high enough to be considered sub-prime

This is honestly the first time on hackernews I've felt like I'm talking to a shill.

"rolling the dice" on taking on more subprime loans in Fannie Mae/Freddy Mac.

https://www.theatlantic.com/business/archive/2011/12/hey-bar...

Your view is popular, simplistic, and wrong. https://www.thisamericanlife.org/355/transcript

Here's a simple hypothetical question: If you or I were to steal a pack of gum from a store and were caught we would have been charged with a misdemeanor. And it would remain in our background record for 10 years.

What does a banker have to do before he/she can be charged with at least a misdemeanor? You're right about the government having a hand in the crisis, but this is ridiculous that no banker was charged.

I think it's important to note that given the revolving doors and deep material connections between financial institutions and the government (and the resultant regulatory capture), there isn't that much meaningful daylight between "government" and "banks".

It did help out some families though. We were able to get into our home using a 5 year 0% interest loan. It was the only way we could afford it. Later we refinanced it to a normal 30 year loan, but there is no way we could have afforded that when we were first getting started. I'm not sure how people just starting out are able to afford homes now. Our home's theoretical value has doubled in price in the last few years and there is no way we could afford to rebuy it now, even with a 0% 5 year mortgage.

I apologize if this is insensitive in some way but I genuinely am hoping to understand and learn. Why is allowing families to buy a home they otherwise can not afford a positive thing?

If a family can not afford a house then they can choose not to own a house. I can understand the point of increasing access to affordable housing, but allowing more people to buy homes seems to have the opposite effect.

I think you assume, and rightfully so based on how people discuss this topic, that 'afford' is a black and white numbers game when it comes to mortgages. It's not. I can clearly 'afford' a home mortgage worth the amount I spend in rent each month, but I cannot get a mortgage for that right now. So really the discussion is/was/should be about easing the mortgage qualifications and restrictions. It was not as if people were giving mortgages for million dollar homes to minimum wage workers, and no one would sanely suggest that is a good idea.

The other side is renting -- where the landlord can raise rents to almost any arbitrary level (well to the market rate, but if you're not making bank it might as well be arbitrary). My understanding is 5-year ARMs where also subject to the whims of the bond market (LIBOR or whatever), so really the difference between renting and mortgaging in this case are just semantics.

I'm curious about your situation. Can you provide additional financial information? Price of the home, area of the country, salary at date of purchase.

I'm wondering why this was downvoted - I'm really curious, too. In particular, what they mean by "first getting started", and whether "home" means a house or something like an apartment/condo.

From my perspective they skipped a step or two and some of the difficulty came from that. I started by renting an apartment with a friend and saved up enough for a down-payment on a normal loan in a condo over two years. It's been five more years since then, and only now would I consider a house (though don't really want to move yet).

The loans of a bank are its product. The forced loans to poor are just a lost leader product. These loans will have negative profits and must be compensated by having loans that are profitable. This is just a government wealth transfer program and at worst would cut into the profits of the banks.

If the banks were profitable leading up to the crash then its still the banks responsibility. The government is allowed to force these rules because the banks are allowed to create money out of thin air.

This is an inevitable consequence of the commodification of housing.

You see a similar thing with student loans. You can't make any reasonable system work when you set the requirements to be that everyone should be able to afford to go to college and free market lenders are the ones responsible for making that happen. I imagine that the first condition is one that most people agree one. So instead of making college cheaper for those people who can't afford it, we decided that we need to entice more lenders to make loans that are financially unsustainable. The end result is we need to guarantee the loans that private businesses give 18 year olds. You see it time and time again where there is a easier and more logical solution that the US refuses to implement because it is a little bit socialist. Instead we go with a more complicated and less practical solution that is more pro-business.

We haven't guaranteed student loans since 2010 when the government started directly issuing student loans.

Today 91% of student loan disbursements are public loans that are funded directly from the treasury. The remaining new private loans aren't federally guaranteed (although we still make it difficult to discharge them in bankruptcy).

Undergrad students are limited to $31k or $57.5k in federal loans (including only $23k of subsidized loans) depending on whether they are a dependent or not. [1] That is still not enough for many students to attend their college of choice.

I will admit I chose the wrong word in my prior comment when I said guaranteed since that has a very specific meaning in this context. I was using that phrase more colloquially because there are other ways that the government protects the lender beyond a literal guarantee. For example, student loan debt cannot be discharged in a bankruptcy like mortgages, medical debt, or credit card debt. This was done because a private lender is normally heavily disincentivized from loaning money to someone with no credit history, no collateral, no income, and no expectation to start making payments on the loan for years.

[1] - https://studentaid.ed.gov/sa/types/loans/subsidized-unsubsid...

It's enough that only a small percentage of students are taking out private loans. New private loans are a very small part of the problem.

I'm not really concerned with whether or not students are able to attend their "college of choice."

If government loans provide enough to go to a state school, or even enough to live at home or off campus and go to a community college for the first 2 years, I'm fine with that.

Also you'll notice that I mentioned bankruptcy in my comment.

What is the easier, little-bit socialist solution to home ownership?

The answer is to create laws that allow developers to build more housing.

The price of housing in many high cost of living is completely unrelated to how much it cost to build the apartment building.

Or in other words, the actual construction of the building is the easy part. It is the government that is getting in the way of reduced prices

> The answer is to create laws that allow developers to build more housing

I didn't know reducing regulation on businesses was the socialist solution. But yeah, sounds good to me.

Well, presumably socialists care as much about allowing people to give cheaply as do free market advocates.

I am not sure why a socialist would be opposed to lower living expenses for poor people.

Taxes and tax incentives.

But not the current ones.

We should, if we want to use tax policy to promote home ownership outside of the wealthy, be subsidizing principal payments for owner-occupied primary residences meeting certain local and personal affordability standards, and possibly tax-favoring sale proceeds for sales of property when, after sale, it will be owner-occupied primary residence meeting affordability standards.

The U.S. does that. Loan interest and capital gains are treated much differently by the U.S. tax system if they are on a primary residence rather than on other assets.

(More often than not, I see criticism of this on HN.)

Those benefits are regressive which results in the them barely moving the needle for working or middle class families. It goes back to the original comment in this thread that it is implemented in such a way that it has a nearly opposite result to its supposed intended effect.

I agree. That is often the case with taxes and tax incentives.

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