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Even if you need your home to live in, you can still borrow against your property value, essentially "eating the bricks".

Alternatively, you can use the value of your house as an emergency fund: If you desperately need money, you can move into something smaller, or more distant from the city, and cash out.

If you do neither of these things, your children will inherit the value of your house. Either way, the money you gain are real money, and you actually gain them.

> Even if you need your home to live in, you can still borrow against your property value, essentially "eating the bricks".

This is not a source of money, it's only a source of collateral. Anything you borrow not only has to be paid back, you have to pay interest. And interest rates are higher than they used to be and the standard deduction is now large enough that most people don't get to deduct the interest anymore.

Moreover, it only means anything if the difference in value would have made a difference. If you want to borrow $20,000 then a house with $100,000 in equity is quite sufficient and another $100,000 in equity isn't doing much for you.

> If you desperately need money, you can move into something smaller, or more distant from the city, and cash out.

Houses are much worse for this than e.g. stocks, because they're hard (and extremely inconvenient when you live in it) to sell in a hurry unless you want to a lose a lot of value. A lot of people also can't do this anymore because they got a fixed-rate mortgage before rates went up and now they can't move or they'll have to refinance at the higher rate which would eat most if not more than all of the difference in value.

> If you do neither of these things, your children will inherit the value of your house.

But then they need a place to live and then either can't sell it because they're living in it or get the money from selling it but pay that much again to acquire a different place to live.

It's a housing version of the national debt philosophy, where debt doesn't matter as long as you're outpacing it with growth. If last decade you had $25k HELOC on a 400k house and today you have $50k HELOC on a 800k house, your finances have clearly improved

Except that you still can't sell the house or you won't have a place to live, so they've only improved on paper before you account for the opportunity cost of the higher imputed rent, i.e. the higher cost of living. Meanwhile you could have gotten the $50k HELOC against the $400k house, which was the only part doing anything that would actually affect your life.

You can sell your house and then rent, and that's what old house owners should consider before they have completely exterminated the youth.

If you sell your house and then rent then you'd be paying rent and therefore have direct negative exposure to the high housing costs. That also doesn't create any new supply. You're still living somewhere and therefore still need somewhere to live. For someone else to have a housing unit while you still have one, you have create more, not just play musical chairs.

When you are old maybe you don't need to live in a house that was made for a family? Or you can give your house to your children, and then let them pay your rent. They're already paying their own rent.

Sure, but the only thing available anywhere in your neighbourhood is big houses made for families.

That's the whole missing middle thing, there's luxury pied-à-terre sold to millionaires downtown, and then there's the endless stretch of large single-family houses in the suburbs.

>the standard deduction is now large enough that most people don't get to deduct the interest anymore.

They don't get to itemize their interest deduction, but they still get to deduct from their taxable income an amount equal to or greater than the interest they paid.

The standard deduction was not significantly increased in order to reduce total deductions, it was simply to remove the need to itemize them as often. (And incidentally, to replace the personal exemption deduction which was removed.)

This is in reference to changes to U.S. income tax beginning in 2017.

> They don't get to itemize their interest deduction, but they still get to deduct from their taxable income an amount equal to or greater than the interest they paid.

But they get to deduct that amount regardless of whether they paid any interest, so if they take the loan they're paying all of the interest themselves relative to what happens if they don't take the loan.

I know this solution has you interacting with the disgusting poors, but if you have multiple bedrooms, you can rent them out and have roommates defray the cost of the mortgage and property tax, possibly for a profit. Crazy idea, I know, but just something to keep in mind, should one find themselves in that situation.

> I have to wonder to what extent that's actually true.

It’s fairly easy to do the exercise in many real estate markets. For example, look at recent sales on your favorite real estate platform and find neighborhoods with very different property sizes but otherwise similar features. An easy one is Atherton vs the areas of Menlo Park directly adjacent to it. Effectively identical commutes, literally the same schools, etc. Menlo Park is quite down-zoned by any reasonable standard, but Atherton is very down-zoned and has huge lots. The houses in Atherton look more expensive, but they’re actually dramatically less valuable per unit property size. If you owned property in Atherton and wanted to increase your property value, the best thing you could do is to magically teleport your property a single block away out of Atherton.

You’re picking literally the worst comparison. Atherton is almost impossible to compare to anything because houses like that are so insanely expensive to maintain and top end market size caps the value.

Literally you have no idea what you’re talking about. I mean it’s hard to imagine someone would have written this in good faith it’s so ridiculous.

This seems to be the conundrum in arguments like these — they baffle us because the comments are either quite obviously disingenuous or so radically stupid you lose hope in humanity.

I tend to agree. There might be a big window for someone motivated to get a course "how to maximise the value of your house purchase" into schools to cover all that. If people are going to be greedy and selfish at least they shouldn't be stupid about it, land and housing policy is one of the more consequential things society deals with.

It can go both ways. If a developer wants your house for the land you want big. But if you stay as a house and your neighbour becomes the high rise and you cant then you lose out.

That's assuming there would only be one developer building one new building, which isn't really the idea here.

Not the idea but in reality without government initiated land forced sale you need

1. Someone(s) to agree to sell some land

2. Usually several adjacent plots to have enough space to build - get them all to sell

3. Planning permission

4. Zoning (but we assume that is fixed here)

5. Profit in the proposed development

6. The buyer

So a lot is needed. Now game theoretically it may be better to be nimby.

Also some people wont sell they are sentiment motivated.

> Someone(s) to agree to sell some land

If you rezone some area, there are already going to be some number of units on the market to begin with. Then add developers willing to pay more than the current market price because it has become profitable and you get even more.

> Usually several adjacent plots to have enough space to build - get them all to sell

This is by no means necessary. You buy one plot of land, replace a single house with a 5-story condo containing 10-20 units. The whole idea is that you don't need a lot of land but rather taller buildings.

> Planning permission

This is the same premise as zoning.

> Profit in the proposed development

If you can buy a unit for e.g. $500,000 and build 20 units that each sell for $350,000, that's likely to be profitable.

> The buyer

The problem we're trying to solve is the huge amount of unmet demand for housing. If you ran out of buyers the problem is solved.

> If you can buy a unit for e.g. $500,000 and build 20 units that each sell for $350,000, that's likely to be profitable

True, forgetting construction costs and assuming you have a gun to point at the land seller's head to sell cheap.

> This is the same premise as zoning.

No you need to get approval to build the thing. Zoning is one aspect. Necessary but not sufficent.

> This is by no means necessary. You buy one plot of land, replace a single house with a 5-story condo containing 10-20 units. The whole idea is that you don't need a lot of land but rather taller buildings.

Depends. Maybe quarter acre is enough but typical burbs you may have 200-400sqm. Depends what country I guess.

Hard to do this individually. And profitably. That is why in London you see long streets of appartments 5 stories high. Or maybe they were houses but already terraces so easy to convert. It will all depend on the specifics but most often you need to join lots unless fortunate to have a big plot of land or something that only requires repartitioning.

> The problem we're trying to solve is the huge amount of unmet demand for housing. If you ran out of buyers the problem is solved.

I meant buyer of the land. Not the end product.

> True, forgetting construction costs and assuming you have a gun to point at the land seller's head to sell cheap.

$500k is more than the median US house price and the construction company is in the business of doing construction. The construction costs are their profit.

> No you need to get approval to build the thing. Zoning is one aspect. Necessary but not sufficent.

The premise is that you're going to reform planning and zoning to allow new construction. That implies changing the rules so that the planning people are going to approve it.

> Maybe quarter acre is enough but typical burbs you may have 200-400sqm.

The lot size? A lot of these places are currently a single house on a one acre lot.

> I meant buyer of the land.

The buyer of the land is the construction company.

Neighbours can get together to sell their land together, then you can set minimum prices etc. Of course, it requires only one owner not to join for this to not work, but depending on their location they might experience a lower QoL due to construction and a changed neighbourhood if their neighbours sell.

I feel it’s a bit disingenuous to discuss that a developer might pay more for a lot with a house on it, to build more houses, but you don’t really touch on, at all, how much the resulting housing might cost. Surely 20 units on a single lot will be cheaper than the single family house.

Now you have potentially 20 families, or at least 20 individuals, paying taxes, participating in the local economy, etc instead of just one single family. Lots of economic benefits to consider here but saying “downzoning good, actually” because a developer might pay more? Idk. seems pretty poorly thought out.

> Surely 20 units on a single lot will be cheaper than the single family house.

Those units will cost less -- largely because at scale they're resulting in more housing supply -- but the detached houses will decline in value in terms of housing but increase in value in terms of land because you can now build more on the lot.

> saying “downzoning good, actually” because a developer might pay more?

The argument is the opposite. Downzoning is bad -- even for existing homeowners -- because a developer would otherwise pay them more for their land than they'd be losing in the value of their house.