The Starter House Is Nearly Extinct (2022)
strongtowns.org
strongtowns.org
Exactly why a legal household (family, single, etc) living in a home 35% or more of the year should be taxed at a lesser rate and anyone 'investing' in rentals of any sort (not living there themselves) should be _punishingly_ taxed.
Some people are all about that.
I'm a ( relatively new ) US citizen and I'm all about that type of taxes. I've seen what taxes can do in other part of the word, and that my go-to solution for all issue in this country. Redistribution.
Pretty sure my enthusiasm will be tempered with time :)
More seriously, highly touristy place impacted by AirBB landlord snatching the whole housing market would be receptive, too.
if I have a cottage in the next state, when I file and if I have to pay, does that go to the other state?
I had a actual country in mind, where tax are collected on a national level. ( note my use of national, not federal )
I get your question and it’s a valid one. Sorry to be grumpy.
I’m just tired of “state” being a constant push back to every single topic. I think it was a powerful idea to quickly implement the take over of the continent, but the usefulness might start to stretch.
Agree with the first, not the second. It not only disincentivises development, it also promotes in-the-family cronyism that corrodes the connection between legal ownership and control. A tax differential which feeds a resident-owner subsidy is more than enough.
The reality is a society isn't richer just because people own home.
I much rather live in a society with low ownership rates and good zoning and land use policies. Then in a society with high ownership rates and bad zoning and land use policy.
It seems to me the US argues way to much about home ownership and not enough about zoning and land use.
The reality of the tax system is that current single family homes are ALWAYS massively undertaxed. Strontowns has lots of data on that. What you are suggesting would make this issue even worse because multi-family homes are often by institutional investors too.
A land-value tax, a fee based service cost (block based) and much higher cost for the highway. Plus of course changes in the insane zoning laws. Are real solutions to real problems.
Land value tax pushes speculators and people with empty properties or under-used property.
People who live in subburb don't lose on a land value tax based system.
“Replace” seems to indicate that a tax can go away.
At which point they raise the rent to cover those taxes, thus the people punished are the renters. Mostly people who already can't to afford to buy or the transaction costs of buying and then selling again short-term. That would be a very regressive tax.
And on top of that, it discourages developing rentals and making them available, even further exacerbating the housing supply problems and making life more difficult for less-wealthy people (or really anyone who is not a homeowner).
Why is it that people don’t seem to grasp this?
For my first 15 years out of school, renting was the best. Every year I would run the numbers based on the market prices and downpayment I could afford, and conclude that it was more advantageous for me to continue renting, in terms of total cost of ownership.
Renting in my younger years allowed me to move around, following economic and family tailwinds wherever they took me without being burdened by a piece of property that has insane transaction costs (multiple percentage points).
Now that I'm older and less likely to move around in my life, I'm able to afford to be a homeowner. It's good, but unexpectedly having to shell out thousands of dollars every time the house has a problem (plumbing, AC, windows, etc) takes getting used to.
I feel that this was the right call when I compare with a few relatives who are about my age and bought property earlier. They had to change jobs afterwards due to economic changes, and moved to a different city or country, but they didn't manage to sell their property at the price they wanted. So they're now reluctant landlords, dealing at a distance with problematic tenants, and renting a new place of their own in a new city. That feels like a headache I'm happy not to have.
His dad's reasoning was simple: he graduated from a good college, and by all accounts, he was going to have a strong career ahead of him. It was almost a certainty that he would make more money in 10 years than he was making currently. The mortgage might be XX% of his income at 22, but at 32, it would be just X% of his income.
It took a toll on his finances early on in his career, but by the time he reached 33, he'd paid off the house. Now he's starting a family and he never has to worry about saving for a house or paying off a loan.
So depending on your situation, it really does make sense to take on a heavy loan upfront, especially when you have a strong career ahead of you.
The answer is trust fund babies.
But maybe they’ll pull up the ladder if you ask nicely - it would be quite advantageous for them for your children to not receive your wealth, but for them to instead redistribute it amongst themselves and their friends.
And I say this as someone who fundamentally agrees with your point in essence, but can’t see a practical way that doesn’t involve the collapse of nations.
Trust-fund babies aren’t buying single-family homes for a million dollars in Santa Clara.
1.2 millions is 7, GP says that is low for the area, aka they’d expect mid 7 or above, not that they’d expect 6.
I am contemplating moving back to my hometown of Sacramento, which is a three hour train ride to San Jose via the Amtrak Capitol Corridor. Sacramento is close enough to my Silicon Valley office to where I could attend my once-per-week in-person meetings (I work a hybrid role), and it's a very diverse metro area with many cultural amenities. I'm admittedly not crazy about returning to Sacramento, but I find it better than the alternatives.
Sure, the weather is shit here most of the year but you get what you pay for.
I'm here in Houston, military brat, my parents got on the property ladder, I did as well, including a "starter home" where HUD paid the down payment. (Currently in my 3rd house I bought at 35 due to a job in Austin, which is a major outlier apparently.)
Still a ton of affordable, low cust suburban cookie cutter homes here in the $200s. 3 bedroom, 2 car garage, grass..
I see articles like this and think I'm taking crazy pills.
But maybe because I never lived on the west coast? Is zoning restriction a poorly use tool there?
Give it time, there's a lot of long-term damage to the housing market and this is just a baby step in the right direction.
> What is the net impact on quality of life?
Well hopefully when this thing really gets rolling, quality of life might improve for the 25% of renters in the state who are paying over 50% of their income in rent and utilities.
Not yet. The first wave of developments is now in the pipeline, not yet built.
I am sympathetic to the elderly wanting to age in place. At the brute level of politics, they can argue it is simply a game of clashing interests, young vs old, and the old know how to play the game better (again by simply voting, it isn't rocket science).
However the economy is suffering because housing near employment centers is often controlled by people who no longer work. This introduces inefficiencies. A retired homeowner could argue, then move the jobs. But that is precisely the inefficiency. Jobs are costlier to move than retirees.
This is why I come down on the side of the youth. The economy is underperforming, and that affects everyone. This makes it more than a clash of competing interests. It makes it a typical political deformation when a motivated interest group controls policy to the detriment of everyone else.
Hospitals, doctor's offices, pharmacies, ambulance services, all will need to move to be closer to the elderly. That is often a sizable chunk of the employment in an area.
Labor such as yardwork, snow removal, home repairs - things that young fit people can do themselves and can't afford to hire people for, but elderly people can't do and instead hire people for - those jobs would all need to move to be closer to the elderly.
Public transit ridership often skews to the elderly who no longer drive. It's vital to their mobility. So you'd need to move public transit with them.
Retail and restaurants - working people are at work in the day, a sizable chunk of the customers are older retired people. So you'll need to move the retail and restaurants as well.
If you move all the elderly and all the businesses they use away from the city, what is left? Schools and offices, maybe a few bars, pawnshops, tattoo parlors, and payday loans places?
Mixed-use neighborhoods are definitely a better idea than trying to ship all the elderly off to some rural area where they'd be out of the way. Society benefits from people of different ages, experiences, and classes interacting regularly instead of being segregated.
Cause I’ve met a lot of those folks. Former hippies who bitch about taxes.
For them a traditional cheap 2 bed starter home isn't actually sufficient any more. Using myself as an example my first home is a suburban four bed because i work from home and i should probably smash some kids out in the near future. Nothing smaller (or cheaper) would be viable.
Buying by yourself, buying early and/or buying small is all but dead (unless others have different experiences and my selection of friends are all losers)
This is extremely important because the value of 200k from 2002 is quite different than today.
I get it'll never be near perfect, but I really wish they attempted some method and simply stated it instead of ignoring it. The counter example is go back to 1940's and we're all screaming what happened to the 5,000 starter home?!
I want to believe the conclusions of this piece, but in a way, it's manipulating data to fit the hypothesis.
That would be some really interesting data.
I bet the effect is quite nonuniform.
The argument may well be correct, but the data as presented can't reliably support it.
Developers are still building small houses on small plots, but they sell for more than is affordable, so when you get people talking about building affordable housing, they are talking about building tiny, tiny places out of the cheapest possible materials.
There’s no such thing as affordable housing - https://news.ycombinator.com/item?id=34528025