I have to doubt that recipients of pandemic benefits are the ones buying $800k houses and driving the housing boom.
Housing prices are at historic highs in many non-core cities as demand from covid related changes move high income earners and historically low interest rates allow low monthly payments.
A million dollars in financed money is under 4000$ a month in payments. Many, many couples can afford this. About twenty percent of all income earning couples in the us can afford this.
https://www.vox.com/22524829/wall-street-housing-market-blac...
Things were already going this way. When I left Dallas housing was nearly unaffordable anywhere near the city (where most jobs are) at $110k/year. This was directly caused by comparatively rich people on the coasts getting disillusioned and moving to cheaper areas and folks who can't afford the coasts in the first place moving to cheaper areas. It turned supply and demand upside down, and it destroyed the ability for people who grew up in those areas to have a stake in the city.
Why people care about it now is beyond me. The only difference I see that it's not comparatively rich people anymore, it's actual rich people that are moving.
Edit: To clarify - if you own two properties, rent one, and live in the other, you own one property in which you reside and one property in which you do not reside.
What counts as "own"?
What counts as "property"?
What counts as "reside"?
> What about shopping areas?
> Entertainment?
What about them?
> There are lots of pieces of property that aren't residential that are owned.
Agreed.
who's going to own them? are they not property?
I don't think I understand the point of these questions unless you misread my original statement. I have edited it to add some clarification.
The problem with your solution is that it's just a different problem.
We essentially want to forbid "bad" ownership. But it's hard to define "bad" in a way that doesn't either trample over "good" or "benign" ownership or makes it so subjective, it's pointless.
It has nothing to do with "good" or "bad" ownership. It's about limiting the wealth-storage potential of real estate and promoting more decentralized/egalitarian access to property.
> It has nothing to do with "good" or "bad" ownership. It's about limiting the wealth-storage potential of real estate and promoting more decentralized/egalitarian access to property.
In other words, using real estate solely to store wealth would be a type of bad ownership.
You're trying to avoid making a value judgment so as to not have to defend the values. Or get into a discussion of whether or not we should be deciding these things on values. But it's turtles all the way down.
I agree that more people should be able to acquire property to make a home. Home ownership should be within the reach of a lot more people. And I think real estate speculation for its own sake is bad.
But I also know enough to know that the problem is bigger and more involved than I've given thought to. So any solution I toss around would be half-baked at best. Even if I consider everything I know.
So, I recognize the problem. I agree something must be done. But I also think that limiting ownership of property to "two" is a bad solution.
Yeah... that is the point. Someone else can own that other Taco Bell.
"store wealth" doesn't mean to buy a Taco Bell, fill it with gold bars, then board it up.
It just means buying property that makes money (like a fast food franchise, residential rental, office space, pool, etc).
> "store wealth" doesn't mean to buy a Taco Bell, fill it with gold bars, then board it up.
Didn't say it did. I think everyone here is comfortable with the concept of real estate as an investment that appreciates in value.
> It just means buying property that makes money (like a fast food franchise, residential rental, office space, pool, etc).
That's not storing wealth, that's generating wealth.
You also mention residential rental. You say one cannot own more than two properties. What happens when one property is massive and I build a multi-resident building on it? Is that one property or N properties?
What if I just lease part of my second property to someone else?
What if my residence is a rental? Or just an apartment in a multi-tenant building? Do I own "one" property or a percentage of another? And if it's a percentage, can I now own two full properties?
Or will I be limited by acreage? If limited by acreage, what about farms? Are we going to be compel people to own parts of farms and lease it out to farmers just so crops can be grown?
There are just so many basic problems and questions with your proposal that it tells me you haven't given it much thought.
If someone possesses that property illegally, it would be sold in a public auction. Someone will buy the property unless it's genuinely worthless. If no one buys it, most likely the same thing that already happens with worthless properties would happen: It would be left derelict to rot until eventually public funds incentivize some developer to manage a cleanup and re-purposing of the property.
> That's not storing wealth, that's generating wealth.
It is both.
> What happens when one property is massive and I build a multi-resident building on it? Is that one property or N properties?
It is one property
> What if I just lease part of my second property to someone else?
The same rule applies to each of you: Own no more than one property in which you do not reside. Multi-party ownership would most likely relate somehow to cohabitation. For example: If you live with a life partner, it is reasonable to have both of your names on two properties in which you do not reside. So, in that case you would own two properties in which you do not reside but between the two of you, there is still only one non-residence property per-person.
> What if my residence is a rental? Or just an apartment in a multi-tenant building?
If you do not own the property, then it is not counted as a property that you own. If you reside in the property, then it is not counted as a property in which you do not reside.
> Do I own "one" property or a percentage of another? And if it's a percentage, can I now own two full properties?
If you buy in with a group to own a percentage of some property, that counts as a property you own.
> Or will I be limited by acreage?
I don't think so, no. This is probably a significant attack surface for abuse similar to gerrymandering but would be related more to zoning laws than this property ownership law.
> There are just so many basic problems and questions with your proposal that it tells me you haven't given it much thought.
There are just so many simple answers to your questions that it tells me you haven't given them much though.
> There are just so many simple answers to your questions that it tells me you haven't given them much though.
But your "simple answers" aren't right. And they ignore a lot of fundamental complexities.
> It is one property
Well. There's the loophole. If I buy two adjacent properties, why isn't that one property? Or will it be one when I buy both? If so, then why can't I just creep until I own all the property. Then, since it's my property, I can do what I want. Including selling use rights and all that business. Basically not solving the problem you think your solution solves.
> The same rule applies to each of you: Own no more than one property in which you do not reside. Multi-party ownership would most likely relate somehow to cohabitation. For example: If you live with a life partner, it is reasonable to have both of your names on two properties in which you do not reside. So, in that case you would own two properties in which you do not reside but between the two of you, there is still only one non-residence property per-person.
You understand that a lease is not ownership. It's borrowing. If I lease out office space, that person doesn't own that property, they're just borrowing the use.
> If you buy in with a group to own a percentage of some property, that counts as a property you own.
Why? Why as a whole? Why not as a percentage?
> I don't think so, no. This is probably a significant attack surface for abuse similar to gerrymandering but would be related more to zoning laws than this property ownership law.
Owning all of the acreage is an attack surface as well. It doesn't solve the problem at all.
I'm not sure I'm the one who hasn't given it much thought here. You have an overly simple solution that can't handle even some of the more obvious edge cases.
But, to answer your flippant questions:
Legally possess.
Land and buildings.
Physical and temporal occupation of space and time on the "property" above some reasonable threshold.
I don't really see a problem with that.
edit: Unless I'm misattributing an unintended tone of disagreement to > "I don't really see a problem with that."
Owning one property in which you do not reside is completely reasonable when the rule is "you may not own more than one property in which you do not reside"
I'll edit this clarification into my original post.
They came to this country with nothing while fleeing the holocaust, and managed to own three houses before they retired by renting out their old house each time they moved to a new one.
Unless this was another misunderstanding and you meant to count all previously owned properties to which I would say: If you sell ownership of a property to someone else, you no longer own it.
So you have to be a member of the community and participate in it for a while before you can be a landlord there. I think that at least gets to what you are going for.
I think that makes sense and inherently circumvents the potential for abuse via inheritance as the individual who would potentially inherit the property could just be subject to the exact same limitations based on residence.
I would expect the starting point to be something along the lines of: Any ownership of a property must be associated back to an individual. Even that of a "company owned" property.
Maybe companies would pay some kind of "property retainer" bonus to people with draconian contract terms that skirt the law and keep the property under the companies control despite some individual employee owning it on paper.
Or maybe, companies would just rent whatever property they need.
Why am I being downvoted? Can someone link a study or systematic review that shows there are significant #s of vacant properties.
If you have considered it a lot, what do you think the best case against this position is?
I believe the core concept of essentially capping/limiting the wealth-storage potential of land ownership as a way to help "even the playing field" is fundamentally sound.
I think think the best case against this position is to point out the difficulty of implementing/enforcing it in a way that is not flawed in some way that makes it more trouble than it is worth. What I mean by that is that I think existing interests and powers would most likely find a way to maintain the status quo and that that way wouldn't necessarily be a net gain for everyone. But that, to me, says more about the system overall than about this specific idea.
* Costs:
If the wealthy people are allowed only one house and one other rental, they will build a huge house and rental in a really expensive area, and forego building rental stock in cheap areas. So that means that poorer people will be hurt as there will be less rental stock available to them. Now, you can say, let them buy condos! But a lot of people are not ready for owning their own condo the moment they move out of their parents house, or if they are just spending a summer somewhere, or they have an internship in a different city, etc. E.g. even though the U.S. has an insanely high homeownership rate (probably too high) there is still a good 30% of the population that needs shorter term housing than the commitment of buying a place, but longer term housing than a hotel. And now they wont have that option, or it will be much more expensive for them as the rental stock is large, expensive units in highly desirable areas, and there are fewer of them.
* Ways to bypass it:
Of course it's a bit impractical. Wealthy people in the US will just buy up apartments in Europe or Asia, and wealthy people there will buy up apartments here. So this just creates a class of really remote landlords, because you've made it illegal to be landlord in your own nation.
Also, corporations will buy up apartments -- REITs. But maybe you will ban REITS, which means much of the drivers of more housing are taken off the picture and they focus on building offices only, exacerbating the imbalance between office space and housing.
OK, we did the downsides.
* Benefits:
Well, someone who owns 2 apartment buildings, their own mansion, and 100 million in equities will now own 0 apartment buildings, 1 rental mansion, their own mansion, and 150 million in equities. How is this a better world? And here, I am assuming full compliance.
Point being, I see the benefit as being purely symbolic. Like you have this law passed, and the existence of the law is its own reward. I don't think this is a good way of doing public policy. In fact, it's extremely disempowering to be even turning the legislative process into a LARP. It's a kind of learned helplessness to use the power of the state as therapy instead of to actually solve social problems. Banning plastic straws is one example of this.
Now if you want to say, "Hell let's abolish private ownership of capital", then at least that is going to make a difference and not just be a symbolic thing. It is an honest attempt to get at the root of the issue. But I think people understand this specific attempt is a bad idea, so what they are doing is retreating to these weird little symbolic acts, instead of searching for the next big idea. And I'm not picking on you -- I see this a lot. Just ordinary conversation, and people say "We should ban X", and it's a little worrying how ready people are to ban random things as a form of satisfying some inner unease, due to feeling powerless to address the real, underlying things.
The rental properties will still exist and either some other REIT start-ups will buy them or their price will drop enough that it becomes feasible for would-be-renters to buy them.
It's maybe possible that your assumptions of Judge-Dredd style mega cities are true but I seriously doubt it.
Regarding remote landlords buying property in the US, I'm really not sure at all how this results in a "class of really remote landlords". They would be subject to the same rules and it's not in any way "illegal to be a landlord in your own nation"
As far as benefits,
>Well, someone who owns 2 apartment buildings, their own mansion, and 100 million in equities will now own 0 apartment buildings, 1 rental mansion, their own mansion, and 150 million in equities. How is this a better world? And here, I am assuming full compliance.
The 2 apartment buildings still exist and as far as their inhabitants are concerned the only thing that changes is the owner becomes more likely to give a shit about the property.
I really don't understand how you could possibly see this as "symbolic" unless you don't assume "full compliance". You have to pick one. Either the law exists with compliance and things change or it doesn't exist/has no compliance and is just symbolic.
I am not sure what you are referring to. I wasn't thinking about zoning at all. Don't really care as it doesn't matter.
> Either the rental units will still exist or their price will drop enough that it becomes feasible to buy one almost as easily as you would have rented it otherwise.
Ahh. You thought when I said "mansion", that it must involve some modification in place?
No, housing is a market, it makes no sense to talk about specific units like this. Say you had a 10 unit apartment building that is impossible to own, so it's sold for condos, and then home buyers sell their old home and move in and buy those condos, leaving their old homes, that someone else buys, leaving other homes, that someone else buys, and eventually you get a smattering of 10 homes in random parts of the country that get turned into rental stock. Or maybe some of them are combined into a hotel. Or turned into a corner store. You see, the zoning law that applies to the 10 unit building is not the issue, because as these are shuffled around, the changes will happen where the zoning is flexible, and that will soak up excess demands where zoning is not flexible. This piece of magic is what allows Palo Alto to have strict zoning but people don't need to wander the streets as homeless because zoning flexibility in other markets absorbs increases in demand. Which is not to say that zoning doesn't mess with prices -- it does. But everything is substitutable for a place with different zoning.
Point being, think of what happens to the entire market, not one specific home.
So what will happen to the market?
Well, let's say that there is a demand for 30 million rental units and 80 million owner units. That's the natural state of affairs.
And let's say there are 100 million households, of which 30 million are renters and 70 million are owners, and the 70 million owners collectively own 80 million owner units (some have multiple homes) and 30 million renter units (for the renters). The renters own nothing.
Obviously that's not distributed uniformly. Some owners own only 1 house, some own 2, etc. But things will spread around in this group, it doesn't matter.
So now this law is passed and we have the great shuffle, where households shift their mix of housing and bonds so that instead of one household owning 2 houses and 1 rental unit, and another household owning just one house, now one of these will be sold off so that both own 1 house and 1 rental unit.
Now in the course of this big shuffle, households will adjust their bond/house mix so that some houses end up with more bonds when they sell their house, and others will end with fewer bonds as they buy an extra house. The number of bonds that go long is equal to the ones that go short. There are nt more or less bonds in aggregate, just as there are not more or less houses. And because people can borrow to buy a house, you can go short without having the bond.
The 30 million renter homes will be spread out to some of the 70 million owners who decide to lever up or reduce their bond holdings and increase their property holdings, and there will be 10 million extra homes left that the homeowners can't own.
What to do with these homes? They will be turned into hotels, tesla charging stations, or just take the place of new homes not built. And if zoning laws don't matter, because somewhere in the country those laws are flexible and thats where the tesla charging stations will be built (in Texas).
After the big shuffle ends, you still have an aggregate of 30 million renter units, and 70 million owner units, but alas no vacation homes (it's OK, enough were converted into hotels so people still take vacations. But in Texas.)
The process of arriving at that equilibrium is not worth worrying about, you care about the resulting equilibrium.
But what do we know about this new equilibrium? Well, it will create some discomfort, as home owners would rather have some vacation homes not in Texas. Renters would rather live in apartment buildings, but these were converted into condos. So what you've done is created some mismatches between what people want, and what they can get. This hurts welfare a bit and is usally what happens when people put on the central planning hat and try to remake society by overriding people's choices.
> They would be subject to the same rules and it's not in any way "illegal to be a landlord in your own nation"
Oh, you are introducing restrictions on capital inflows into the mix. That is really cool -- I favor draconian restrictions on capital inflows, because that's basically tariffs. OK, with enough restrictions, then sure, you can enforce compliance.
> Judge-Dredd style mega cities
I don't know judge dredd, but am not saying anything about mega-cities. I'm saying that you have this geographic mismatch, because renters, seeing as how they are more temporary occupants, have a certain need to be in some places, like near schools. Whereas owners have other preferences. And now you've converted the apartments near universities into condos, and the places farther out in the boondocks into the rental stock where the students will live and need to commute a long distance into the school. So this is not a mega city, even though it has worse traffic. But it is the result of some utopian central planner making bad decisions that aren't suitable for a lot of people.
> I really don't understand how you could possibly see this as "symbolic"
It is symbolic because all you've accomplished is to destroy some welfare, but whatever housing equalization you were trying to do has not been accomplished. So in this way it's like the plastic straw ban. OK, people in some blue cities are using soggy paper straws now, but the goal, which is to help the turtles with the straws in their noses, remains unmet, as the plastic gets dumped into the ocean by countries in Africa and India that directly dump their trash into the ocean, and not by developed countries who bury their trash, and keep it out of the ocean. So while there is harm in terms of annoying people, the stated goal of getting straws out of turtle noses remains unmet. In this way, it's symbolic.
> Say you had a 10 unit apartment building that is impossible to own
Nothing about this would make a 10-unit apartment building "impossible to own" (unless you're assuming that owning 10-unit apartment buildings is only feasible at scale.) The individual rental units are not the "property"; the land and building(s) are.
Obviously, serious consideration of this proposal would need to round up a lot of numbers to determine the scale of your "Big Shuffle".
Not when property is a speculative/investment asset (and when you can leverage it to get credit).
Edit to add: More than just a UBI would be needed for the surges probably. Perhaps a more functional Congress would be needed too, at this point.
https://www.nationalmortgagenews.com/news/investors-bought-m...
It's just not true. Housing prices are rising due to record low interest rates (most people folks on monthly payments, not net cost) and demand shifts due to covid. Housing prices in core cities have largely fallen.
Housing prices (in certain areas) are high due to low interest rates, covid related demand changes (moves of high income earners from core cities), and wage growth for high income earners.
I bet if I offered you a billion dollars a square foot you'd sell you beloved childhood home. And If you're the 1 in a billion who'd turn down that deal with that amount of money on the line, I can simply bribe the local government for them to expropriate you.
I do have add-on thought as far as demand shifts contributing to price increases; A lot of the demand was driven by people wanting to move into bigger houses. Those who didn't have enough equity built-up early on could just tack what they wanted onto their selling price and hope for the best.
One more interesting anecdote; In my neighborhood, housing prices have stayed relatively flat since summer of 2020. There are other nearby cities where the prices have increased more, however they often do not have the same property tax rates as where I reside. (prop Taxes are over 1/3 of my monthly 30y mortgage payment, lol)
That directly contradicts the definition in literally the second line of your source.
>Investors — any institute or business that deals in real estate
Institute or business, which doesn't include unincorporated individuals with just a couple of extra properties they rent out.
You can tell they're not included because it says in the article that "investors" only bought "26.5% of multifamily homes" (i.e. multi-unit apartments), so unless you're suggesting that 75% of multifamily buildings aren't being bought as an investment, the numbers don't add up.
This isn't some groundbreaking revelation they had. Corporations and firms are always trying to squeeze as much money as possible. After a few purchases, the stimulus checks go into the hands of the corporations, who are are now flush with newly printed cash. Given that there are few real growth opportunities to invest in, everyone just throws their money at property.
Finally, the base tax is gotta be way above primary dwelling, normal homeowners shouldn't be penalized.
All the $$ raised is to be used for UBI or Medicare For All, it cannot be borrowed from or repurposed.
Lots of people didn’t have to pay rent last year, so landlords (especially smaller ones) had to increase rent for those who could. Also other prices are increasing from inflation and supply shortages.
As long as the price of inflation doesn’t completely cover UBI (which is possible but imo unlikely), it will be at least partly effective.
My rent actually went down.
I attribute the decrease to the two new complexes built next to where we were. But yeah, I was shocked as shit. I moved earlier this year, but still, it was weird.
My wife and I looked at a single family home in 2017 in Boise that was $400k. That was a bit out of our price range at the time. 4 years and a few raises later $400k is now in our price range for a house, but now the same house is $800k. Sigh...
There are probably a lot of problems that should be covered before UBI really, or they're just going to siphon off UBI. Predatory lending is a good one, loans based on UBI payments seem like an easy scam to get into.
If UBI is too hard to figure out, what's the alternative? more government housing? medicare for all? What's the least complicated way to ensure everyone gets housing, food, and healthcare?
All of them would, because with extra money, there would be more demand for these goods and services, but the supply of the good itself hasn't increased. Thus, companies will charge more. In sum, the total increase in charge will be $10.
In addition you are using turing complete in a completely nonsensical way as nobody is using cost of living to compute with.
Based on what you are saying any economic change would be completely unpredictable and the entire human race would be paralyzed by the decision on how to price a Taco. In reality we muddle through while making general predictions about the effects of our actions and reassessing as we go.
And yet, emergent behavior does indeed compute the cost of living. When the emergent behavior itself is based on a stat that itself is based on the cost of living, the emergent behavior will never converge.
> Based on what you are saying any economic change would be completely unpredictable and the entire human race would be paralyzed by the decision on how to price a Taco. In reality we muddle through while making general predictions about the effects of our actions and reassessing as we go.
No. I'm saying that if you raise UBI by $10, then the price of tacos go up by $10, so basing UBI on cost of living is non-sensical because it's a recursive loop.
> Why would it be by magic exactly correlated with the exact figure provided by UBI.
Because if everyone has $10 extra to spend, then there will be more demand for the same number of goods, so sellers will raise their prices. This is not just 'goods' either. There will be more demand for financial assets like stocks, and more importantly, foreign currencies. With the higher demand for foreign currency, it would take more dollars to buy pounds (for example), which means the dollar would lose value relatively. In other words, the dollar will be undergoing inflation.
To an audience that _does_ speak theoretical CS, your sprinkling in of its terminology weakens whatever point you're trying to make and comes off instead as silly and pretentious.
If you base UBI on cost of living, and cost of living depends on UBI, then you find yourself in a feedback loop. My use of turing complete was not really accurate, but it was the context my mind was in when writing this comment.
I make mistakes and sometimes speak unclearly. No need to be pedantic.
The main flaw, to me, is the 1:1 correspondence you draw between the magnitude of UBI-style benefits and cost of living. That may be true (at least under some simplified/idealized econ101 assumptions) if UBI was the sole source of money in the economy, but that's obviously not the case. The crux of the "UBI doesn't cause spiraling inflation" argument is that UBI accounts for a sufficiently small fraction of total incomes that its benefit (greater spending power for lower incomes, and the downstream economic benefits of that spending) outweighs its nonzero but noncrippling inflationary effect.
That is, though the $10 cash benefit you describe may of course increase COL, it does so by some amount between $0 and $10 that is influenced by all sorts of factors you're glossing over.
It just seems obvious to me that if you increase everyone's income by $10, price of goods will go up by $10.
> The crux of the "UBI doesn't cause spiraling inflation" argument is that UBI accounts for a sufficiently small fraction of total incomes that its benefit (greater spending power for lower incomes, and the downstream economic benefits of that spending) outweighs its nonzero but noncrippling inflationary effect.
How could you have greater spending power if we agree that UBI's inflationary effect is proportional to its amount. The moment you give the money out, the spending power goes down.
In my view, this will just lead to the rich getting richer, because companies end up providing the services people will pay money for, and these profits go into the pockets of the rich, who don't really need the money for life necessities, so instead use it as capital.
The poor are no better off and are incentivized to spend the money because of inflationary effects (saving the money results in it having less spending power when they want to sell it), while the rich have no incentive to spend the money since they're already wealthy.
> That is, though the $10 cash benefit you describe may of course increase COL, it does so by some amount between $0 and $10 that is influenced by all sorts of factors you're glossing over.
Can you identify, name, and explain those factors. You accuse me of 'glossing over' some factors in my 'simple' explanation, while you yourself do not identify any of the factors that supposedly would not cause COL to increase.
I'm not on here to argue with people and it seems you have some sort of ideological bone to pick, so this is going to be my last reply. All the best
If they do, how come? They shouldn't unless everyone gets UBI, it's black and white...right?
The fact is it won't go up, because it'll increase opportunities... there's a lot of alternatives lately to normal housing like land co-ops with tiny houses, yurts, etc... Pool 100k in resources, by some land and you can build a earth bag home that's pretty awesome for under 10k.
It's economical, ecological, and very well insulated.
Unlike ireland where rents can be 60% of your take home pay.
Sadly it might not help around here, because right now, it is very profitable to just buy property and leave it empty, since the prices are perpetually rising.
While wages rise, other countries with no universal income gain a competitive advantage in labor costs, across the board.
EDIT: actually, thinking more about this I don't think lower end housing will see such an increase, since most people already have a home. You'll certainly see a rise in price of lower end housing, but it won't offset UBI, since I doubt people will just take ubi to put it into their housing
Inflation won't eat the whole UBI (probably), because there's still supply and demande that other revenue generate. E.g. if I pay 20% of my income for food and UBI doesn't affect my income much, I won't be inclined to increase my spending on food by a big %.