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Comment by zjaffee | Hacker News Reader

How ownership has a very similar effect as rent control, especially in California where prop 13 exists. Should we abolish home ownership and have everyone buy into a single rental market such that prices wouldn't be distorted beyond what median area incomes are.

The issue at hand will always be that there isn't enough housing for newcomers, if we mandated housing construction to grow in a parallel way with office construction and job growth we wouldn't have nearly the sorts of problems we have today.

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You don't have to mandate construction of housing. You just have to get rid of the INSANE barriers to housing construction that exist today in places like SF and the wider Bay Area.

The mandate the post you are replying to speaks of wouldn't be to create housing but tie it to the rate at which other types of buildings are created. I believe the poster is referencing the situation in California where a town will let office space be built for 10k workers but then not allow any housing to be built for those workers.

My belief for that issue is that zoning powers need to be removed from towns and done at a state level as travel technology has made it too easy for towns to push off their negative externalities to other towns. Towns have no incentive to add new housing stock as that leads to more people needing to be serviced and new voters who might push to change the way of life that the current citizens enjoy. Businesses on the other hand, don't get to vote and usually pay much more in taxes than they cost in services. Every city appears to have towns that have realized this an effectively become polluters by letting new business come in but making it other towns problems to pay for. If the state controls zoning, and likely the burden of providing services, then that kind of fucking over of your neighbor won't occur at the level of cities other than ones on interstate borders like NYC and the two Kansas Cities.

I believe we need explicit housing mandates in the way we have parking mandates. Except this time, we'll be creating a more universal public good.

Just as how parking requirements make it much easier to find parking in high density and otherwise crowded areas, housing requirements will do the same for housing. A lot of folks on the public housing side of the debate want to decomodify housing through public ownership, but it would be far more effective if we just mandated housing be a part of every commercial development project nation wide.

This would be good for so many reasons ranging from better land use to much more abundant housing.

Additionally, zoning codes should be a state or federal system, as this would make it much easier to build economies of scale around housing development. But the placement of those zones/codes should still remain in the hands of local muncipalities, as no municipality should be able to protect their right to certain types of euclidian zoning.

I definitely agree with you about zoning needing to be done at the state level. I'm somewhat optimistic that some of the state level zoning initiatives in CA will take hold and we'll see some progress in this area. Fingers crossed!

This will sound counterintuitive but you absolutely have to mandate housing. Compare this to parking requirements, if we want an abundant housing supply we need to distort the market price of housing the same way we did for parking.

Require that new offices build an equal square footage of housing on top of themselves, and you've immediately build enough housing for at least the initial stage of population growth that comes with that new office.

I think you should hope to live in more than the handful of square meters than a classic tech worker occupies in an office.

Housing people on the same ground area than the offices would probably prove to be a huge technical challenge since it would effectively need probably 8 to 10 times the square footage, not to mention I'm not quite sure people really all want to have their colleagues as neighbours.

I'm not saying that the housing would need to go to those who work in the office, if anything it should be a part of the broader open market.

I'm also not saying that the office needs to match the housing supply of it's office workers in full, as a lot of new office development is hiring from people locally as well. But say, if you looked at the Seattle area, where Microsoft and Amazon have built over 10 million square feet of office space in recent years, an extra 10,000 apartments would go a long way in relieving the pressure on housing prices.

Hmm, maybe we could have a "housing credit" market system. For every office building with n workers, require housing for some % of n within the local area. Then the credits would be priced according to the imbalance between residential and commercial construction. Excess housing around? (Hah.) Well the residential builders will have to pay the commercial builders!

With higher property taxes or land value tax that stops being true. It’s true today because our tax policy is designed to use home ownership as a tax shelter, which favors the wealthy over the poor and limits upward mobility.

How is home ownership a tax shelter?

Is this a serious question?

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

"Economists have demonstrated that high-cost high-income areas receive most of the tax benefit. For example, San Francisco, California receives $26,385 per home while El Paso, Texas receives $2,153 per home, a 1,225% difference.[28] The five highest income metros receive 87% of tax inflows, with over half going into California alone.[29]"

Yes, it is a serious question. I was worried you were going to bring up the interest deduction, and you did.

If there are people out there "sheltering" themselves from taxes by paying more in mortgage interest, those people are idiots. Any savings you gained on taxes were already wiped out by the fact that you effectively threw away money on your home (i.e. your money did not go into equity; to you, the money just went into a black hole).

I understand that they pay less in taxes as a result of mortgage interest, but if you have an actual choice between (1) spending $1 on mortgage interest and getting a tax deduction or (2) spending $1 on principal and not getting a tax deduction, the choice that leaves you wealthier is #2. Obviously this is not how mortgage payments work and ignores choice (3) of putting money in some other asset, and the time value of money should be considered, but for each equivalent dollar, I would rather get more equity in my home than a tax deduction. The tax deduction is nominally smaller than the equity you would gain on an equivalent amount of money going to principal rather than interest.

This isn't even considering the extra costs of homeownsership, especially property tax and maintenance (and the latter is tax deductible to a much smaller extent than mortgage interest).

Not the OP, but also to consider is the high exemption on capital gains tax to be paid on a home sale: $250k for single owners, or $500k for joint owners. If I buy a house for $500k, live in it for a few years, and sell it for $750k, I get that $250k in gains tax-free.

> The tax deduction is nominally smaller than the equity you would gain on an equivalent amount of money going to principal rather than interest.

True, but you can't ignore the "choice (3)" that you mention. I'm not in the market for a house right now, but if I were, I would absolutely get a mortgage even though I could pay cash for the whole thing. It's a non-zero risk, but I feel it's a reasonable bet to believe I can make enough in the markets to more than offset the mortgage interest, especially with the MID in play reducing my overall tax.

That doesn't really address the point the parent was making about buying a house being a good tax shelter (I agree with your premise if you restrict thinking to just that), but I don't think it's safe to ignore it in the bigger picture, either.

The exemption on capital gain tax on house sales is for avoiding taxing the gain from inflation over the years.

Doesn't really matter what it's for; at the end of the day you don't pay tax on the gain. If I invest in a stock or mutual fund that sadly only grows with inflation, the IRS still gets its cut from my gains. Home sales are (AFAIK) unique in this treatment.

This is more just a subsidy to the well off than it is a tax shelter.

The first quarter/half million (depending on marital status) of capital gains on your primary residence is exempt from taxation.

We should abolish prop 13. Incentivize homeowners to support more housing, as happens in Texas.

That as about as likely as introducing an income tax in Texas.

With the hordes of rats fleeing a certain sinking ship of a state on the west coast anything is possible. Texas might not be Texas in 20yr.

The Texas constitution is written in such a way to provide defense-in-depth against an income tax, or any tax that even looks like an income tax. I don’t even think you’re allowed to file a bill with lege council that lets you file a bill to pass an amendment to remove the wording that prevents income tax—that sort of thing. You’d for sure get sued, and there’s no way the reps would keep their jobs.

What do you mean with that? Honest question, I am not from the US.

That so many people from California will move to Texas over the next 20 years that it will change the voting population’s habits and Texas will get a state income tax.

>Should we abolish home ownership and have everyone buy into a single rental market such that prices wouldn't be distorted beyond what median area incomes are.

Henry George would say so: https://en.wikipedia.org/wiki/Georgism

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