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Comment by tootie | Hacker News Reader

Yup. Building wealth through home ownership directly implies homes becoming unaffordable for new buyers.

Right. There are good financial reasons to own a home even if you don't think it's going to be a great investment, just as there are very good reasons not to own a home even if you have the means. It's the absolute, which is the premise of this policy proposal, that's the problem.

And home ownership rates are well within the normal range for the US post war regime! So this is a policy proposal that will likely decrease affordability to fix a problem that doesn’t exist.

Homeownership rates are only ~flat in aggregate because the population is aging and older people are more likely to own their homes. The homeownership rates of Americans aged <35, 35-44, and 45-54 are down ~10% since 1982 and continuing to decrease. https://www.census.gov/housing/hvs/data/charts/fig07.pdf

You just told a story about how we need to build more housing. Kasey and I agree with you about that.

The point is that there isn't a distortionary corporate investment force preventing young people from doing that; what there are is zoning and permitting rules locking every desirable location into stasis.

I agree philosophically though there is a lot that can be done short of upending the entire American wealth structure like removing barriers to housing construction (to dramatically increase supply) as well as subsidizing first time buyers eg with preferential mortgage rates and tax write offs.

* Dramatically increasing supply will dramatically reduce home prices. That's the point.

* Subsidizing first-time buyers will increase home prices. That's the opposite of the point.

Not true re #1, yes creating a glut of housing beyond demand in the market would reduce home prices, but other markets like Tokyo that do build a lot of housing still see increasing home values despite stable prices. Land value goes up, but units per unit land goes up too, so each individual unit does not necessarily go down. Maybe the value of your physical single family home goes down, but the value of the land it stands on goes way up when the density and infrastructure around it intensifies, so it does not follow that the homeowner loses out (most likely they make money)

Subsidizing first time buyers does increase prices overall but you have to consider the effect of such a policy relative to its cost. It has potentially positive externalities so that’s worth considering while balancing it out eg with the previous policy.

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