Housing should have never been allowed to be an 'investment' in the first place. We've known that, but I think these chickens are finally coming home to roost.
says nearly every generation of ideal-minded and dissatisfied young people fwiw
Boomers were once a very liberal generation.
Probably not. I'm 59, it's been talked about my entire life, in two countries. Governments are unwilling to fundamentally reorganize the basics of property ownership and building to help their citizens lead better (or even reasonable) lives, but they will go the extra mile or three to make sure that a mass of young and angry protestors do not get what they want.
That's just categorically false. There are quite a few countries that do this very thing, like Austria.
But if that's true, then Vienna is just one of the handful of the exceptions that prove the rule.
The fact that there's a city in Austria that behaves differently to most governments in most parts of the world does not invalidate the point I was making.
In general, there's a housing shortage, but there are many places with a surplus. They are marked in purple/blue on the map in this article.
Hong Kong just did it. They weren't successful.
Brazil a decade ago was also driven by cost of living and they won.
US? I don't know. Occupy Wall Street was eradicated with terrifying efficiency. I'm not that optimistic about social movements here.
I dropped by Occupy a few times. They did themselves in by failing to specify demands. All form and no substance.
The media did a pretty good job of depicting people being dragged away by riot police screaming as hippies getting bored and leaving.
This isn’t an ask. It’s a general grievance.
> media did a pretty good job of depicting people being dragged away by riot police screaming as hippies getting bored and leaving
I was there. Never saw screaming people dragged around. Did see tear gas, which isn’t nice. Not saying it didn’t happen, but it wasn’t common. Mostly, people were yelling at each other about stuff being stolen from their tents.
It's pretty obviously both.
>I was there. Never saw screaming people dragged around. Did see tear gas, which isn’t nice
Thats the system using violence to defend itself. Just like in Russia.
It’s not. “Redistribute wealth” isn’t a policy. It’s better than money in politics, though, because we don’t even have consensus on what that means.
This is what policy looks like, even in general terms:
1) More-progressive taxation 2) Universal healthcare 3) Closing New York’s LLC loophole (done)
Et cetera. Unfortunately, delineating these policies, agreeing to them internally and then messaging on them externally is a lot more work than spouting general grievances.
> the system using violence to defend itself. Just like in Russia.
It’s the system clearing a public park. Nobody cared what people were asking for at that point, the place smelled of piss.
You lost credibility with the false comparison with Russia, but I think you know that.
Those are so vague as to be meaningless, and so sweeping as to be quixotic. Protests always fail when there is not a clear and attainable path to success. This is something successful movements understand, and unsuccessful ones don't.
They want that number to be pushed down.
Are you under the impression that this is a complicated demand?
No, it isn’t. Let’s start with scoping. Everyone in America is immeasurably better off than the median in some countries. Clearly not what anyone in Zuccotti Park meant.
> Are you under the impression that this is a complicated demand?
Are you under the impression it’s not? It would push down inequality to remove student loan and public transport subsidies in cities and cut cheques to the poorest rural Americans. That’s obviously not what was wanted by those protesters.
1. This is not a logical argument - it is a red herring combined with whataboutism (forget American gini! whatabout global gini?!).
2. If you take into account that they have to pay rent in America, go to college in America and pay for medical care in America the median American may live in the richest country in the world but that doesn't make them the richest median citizens. Not even close.
>Are you under the impression it’s not?
Of course. I'm not the one playing dumb for political effect here.
>It would push down inequality ... to cut cheques to the poorest rural Americans. That’s obviously not what was wanted by those protesters.
No, it is. And the US establishment violently crushed the protest precisely because this is the furthest thing from their preferred outcome.
I'm guessing you approved?
It’s also hard to protest if you are scraping by, and a long commitment to protesting means you lose your job
Capitalism sadly wins far too often for me to think this is achievable
18 to 24-year olds still punch in around two-thirds weight at the voting booth [1]. Protesting is useless without the ballot-box threat; absent it, the politically savvy move is to crack down and preserve voters’ benefits.
[1] https://www.statista.com/statistics/1096299/voter-turnout-pr...
Sounds like a political issue to me.
65% of Americans own a home. Making housing more affordable means taking an axe to their net worth. That's why it won't happen.
What it shouldn't be is a speculative investment for companies, non residents or wealthy individuals.
Which means it could still be relatively affordable for people who live in the area (minus income inequality issues) while also being a good investment compared to national average.
In good functioning economy, building a same house with same features and such should get cheaper as efficiency gets better. Materials should be at least cheaper.
Ofc, we want bigger and more efficient housing with more features so that counteracts it, but how much should it counteract?
In nominal terms it's inevitable. In real terms, this should not be the case.
Housing is a commodity. It's the only commodity which has increased in price in real terms over time. This is because we've turned it into a retirement account.
Because there is competition a certain premium is paid. And if we assume further economical growth, the premium that an individual is capable of paying likewise should increase. Therefore, all things being equal, the prices should increase.
Source: career hedge fund commodities trader.
also, in Japan housing is a depreciating asset and while their economy has well known challenges over the last few decades, they're still an advanced economy that the majority of nations on Earth would probably be happy to trade places with. an outlier for sure, but worth mentioning
You control this through property tax.
Yes, the USA was founded by english nobility for english nobility. Is it really so surprising they upheld one of the most important institutions for ensuring that rich people can get paid for being rich? They also upheld slavery for similar reasons, though thankfully we sorted that one out 150 years ago.
Private ownership of land is actually in the governments best interest. Private individuals will improve land creating further tax. And buildings and people are the 2 things of value a government has. With private ownership the people are truly invested in the government and the government with the people.
The exponential decay of net-present-value calculations means that time horizons do not have to be infinite to encourage investment. Making them infinite doesn't even help very much at all. When you compare this against the dramatically higher capital requirements of the perpetual ownership model, it actually has very little to offer. Except ensuring that rich people can get paid for being rich, of course, which one starts to suspect is the actual purpose.
I want leases, but I'd settle for LVT.
http://www.thebubblebubble.com/wp-content/uploads/2012/05/Ja...
Maybe land in popular places is always a good investment, or maybe that sentiment is already factored into the price when you buy in, and subsequent returns are mainly driven by macro factors like interest rate adjustments and banking crises?
I can tell you this: if I added up all home improvements, maintenance, and property taxes I’ve paid over 20 years then I’d take a significant loss when selling at current inflated values. Maybe when you look at the total cost of ownership for typical family owned homes then in many cases it’s not actually investment, maybe more like a savings account. That’s the best I’d get out of my home and I bought cheap w/ prices, inflated as they are, roughly 150% higher than my sticker price 20 years ago. The financial model for developers is of course different but if you’re going to look at home ownership as an investment for the owner then you can’t do that going from the buying price to selling price, you have add in all the costs of ownership. (Disclaimer: my TCO loss on my home despite rising prices would be do in large part because of truly massive property taxes.)
I don’t see an easy way to outlaw the abilities for housing to be an investment. Even the it wouldn’t do anything at all to actually get people into housing, it would just make it more affordable for the lucky few who got to buy in at the reduced price.
We just need to build more housing and have laws/regulations/rules in place that stop the NIMBY nonsense. No reasonable development can be denied if the increase in housing supply is lagging behind local increased population growth. Incentives to developers to build more than that minimum. Tax incentives for developers to keep prices within confines bands of local median incomes, tax penalties— a luxury tax— against selling a certain amount above these limits.
And I don’t know, these may be really bad ideas too. But all I see disallowing investment accomplishing is to have housing inventory stagnate and make housing access partly a game of who you know to get an inside track— similar to how some affordable housing programs work right now. Around me, apartment complexes that are part of affordable housing programs have 2+ year waiting lists, some should be condemned and closed, but I’ve seen people pretty much walk into a recently opened space when they know someone who administers the program for that complex.
- ban anyone non-resident in the country from owning property
- create an exponential property tax. 0% for first home, 2% for second home, 4% for third home, 8% for fourth home etc to discourage mass renting.
- to make the point above easier to enforce, make it illegal for companies to own residential property other than a few exceptions such as developer companies holding newly built property that they’re selling, banks holding repossessions etc. All property must be owned by an individual citizen.
- Mandate that developers build >50% affordable housing. Earmark this housing for first time buyers only. Non compliance means the developer is shut down and loses their license.
- Mandate that developers build on their land or else have it seized by the government to avoid developers land banking and waiting it out for a change of administration which would reverse all the above rules so developers can go back to raking in absurd profits.
This is a trap. It sounds good on paper. In practice, every bureaucratic busybody wants to define affordability to deliver to their constituents. This dramatically raises construction costs. It’s a current cost adjuvant in New York and San Francisco.
A simple first-time homebuyer (or single homeowner) requirement should suffice in segregating the market.
It’s a trap if you let it be a trap. You define affordability using median earnings of the area in question. The properties built are then sold for no more than 3.5x that amount.
Let me introduce you to the myriad of definitions of income and area, and how dare you suggest we include public subsidies or salaries in the calculation, also, why aren’t we creating a special category for [things]. These floating variables immediately corrupt. You can fight political nature, or you can write good policy.
This is why, at the national level, you have someone who sets these definitions using common sense. All of these are completely surmountable problems - the only thing lacking is political will to do it and defeatist attitudes.
You’re going to federalise house pricing? And again, you’re depending on commonsensical bureaucracy. That’s a losing move. Especially when rules-based systems are available.
Put another way: if you empowered such a panel, there would be political opportunity in using its own rules to re-orient its mission.
It is if we take a defeatist attitude. Would you be saying the same thing if you knew it was the founding fathers who were going to be writing the laws or if it was Abraham Lincoln in charge? At some point in time, everyone just decided to get completely defeatist about politics and what is possible to achieve and nothing will change until that attitude is overcome.
As societies, we’ve become weirdly tolerant of deception and corruption - I assume as a result of the financial crisis and lack of punishment for those involved. Personally, I think the only antidote is to start getting really fucking tough on white collar crime - and that means long jail sentences for offenders. We also need to start rooting out all the nonsense we’ve allowed to creep into the system and stop allowing people to exploit technicalities that fly in the spirit of the law for their own personal gain. Maybe this means expanding the laws as written to include stated aims of the written law to allow for easier interpretation by juries in disputed cases. At the minute, we just allow people to exploit loopholes and shrug our shoulders saying “fair enough” when everyone can see plain as day that the spirit of the law is being flouted even if it is technically legal. Im not saying people should be jailed for this kind of behaviour like they should if they’re outright engaging in fraud, but we definitely should not be ruling in their favour.
Also I’m in the UK, not the US. The same problem exists in all English speaking countries.
Laws versus rules. The latter should be simple, because there are too many of them to keep an eye on. In any case, adding Nu element of discretion guarantees a litigation carousel. Another mode through which affordable-housing schemes fail.
> the only antidote is to start getting really fucking tough on white collar crime - and that means long jail sentences for offenders
Totally agree. Violence, fraud and corruption strike me as the three that deserve long, unyielding jail time.
How do you ensure people aren’t using human or corporate straw buyers to take advantage of this?
You can’t. Plenty of countries have no-foreigner and first-time only requirements, and they’re flagrantly violated throughout. There isn’t a demand-side solution to housing I’ve seen. That said, there are better and worse ideas, and the affordable-housing gimmick is among the worst.
Every country with these rules does this. What happens is the political opposition winds up in jail and then people riot and burn things. Also, when the stakes are that high, law enforcement loses fidelity.
That’s what I’m arguing against. It isn’t necessary. There are better ways than classic affordable housing. (Your other suggestions, for example.) It’s a broken policy model that one would sooner inject into a workable framework in an effort to tank it than seriously pursue.
Exponential property taxes, vacancy taxes, zoning limits–these work, and don’t require a discretionary bureaucracy. Price regulation through affordable-housing mandates do not.