Public-ownership rental as a third option to renting or owning a house(theatlantic.com)
theatlantic.com
Public-ownership rental as a third option to renting or owning a house
https://www.theatlantic.com/ideas/archive/2021/03/why-its-better-to-rent-than-to-own/618254
261 comments
My dad administered a similar program for getting historically disadvantaged people owning multi family homes.
Basically, folks would sign up for home ownership education, do a bunch of stuff related to maintenance, etc and shop for a two family. The housing authority (through a grant) would essentially provide a loan for 20-30% of the purchase price for down payment and some repairs. The loan would be forgiven in 5 years.
It was pretty transformative and really changed lives for the better. About 90% of the participants made it through year 5.
Basically, folks would sign up for home ownership education, do a bunch of stuff related to maintenance, etc and shop for a two family. The housing authority (through a grant) would essentially provide a loan for 20-30% of the purchase price for down payment and some repairs. The loan would be forgiven in 5 years.
It was pretty transformative and really changed lives for the better. About 90% of the participants made it through year 5.
Habitat For Humanity[1] works in a similar way. At least in my town, families help to build or renovate the home they move into, and their mortgage payments are capped at a reasonable percentage of their income (I think 30%).
1: https://www.habitat.org/about/faq#homeownership
1: https://www.habitat.org/about/faq#homeownership
HfH typically provides the mortgage with a 0% interest rate also. They are a tremendous program that should be scaled up.
Like any limited (by funds or numbers) program HfH can do great good but it can also turn away those form whom it wouldn’t work (not capable of meeting the requirements/sticking it out).
Handling EVERY case is much more difficult (not that we shouldn’t expand HfH-style programs). A multitude of solutions are needed and trying to limit the types is part of the problem.
Handling EVERY case is much more difficult (not that we shouldn’t expand HfH-style programs). A multitude of solutions are needed and trying to limit the types is part of the problem.
Agree entirely.
All these programs that subsidize the cost of borrowing merely drive up the price of houses. This is why things like the mortgage interest deduction or zero percent financing are not in the long term interests of home buyers when they are "scaled up", and when they are niche programs they are basically a convoluted form of charity. There is nothing wrong with that, some people like their charities to be convoluted and have a penchant for financial engineering, but at the end of the day charities, by definition, cannot scale: A large group can give money to a small group, but when the society as a whole gives money to itself then it is no longer charity, it's just spending money on yourself in a convoluted way.
This is why Phillips's full program is based on three tiers: supply (addressing the amount of housing available), security (tenants' rights), and subsidy (assistance to those with specific needs).
You need at least all three components. I'd suggest wage support (UBI / employer of last resort) being another leg that would help, given the relationship of rents and wages economically (wages tend to or below subsistence, rents to all consumer surplus).
But this seems a damned good start.
You need at least all three components. I'd suggest wage support (UBI / employer of last resort) being another leg that would help, given the relationship of rents and wages economically (wages tend to or below subsistence, rents to all consumer surplus).
But this seems a damned good start.
Not always. The program I described was really a way to transition folks into a sustainable lifestyle. Rents in this place are more than property values, so training to let working class people afford a home and rent the downstairs bring stability to the family and he neighborhood.
Real estate is insane because we’re in an era where wealth is being shoveled into a few peoples hands, and we are literally printing money to extend a boom cycle for as long as possible without regard for the future. The house I grew up in Queens was purchased by my folks in 1976 for $15 and recently sold for $1.3M. My dad was a clerk for the city then, and my uncle, now a millionaire across the street was an able seaman.
Real estate is insane because we’re in an era where wealth is being shoveled into a few peoples hands, and we are literally printing money to extend a boom cycle for as long as possible without regard for the future. The house I grew up in Queens was purchased by my folks in 1976 for $15 and recently sold for $1.3M. My dad was a clerk for the city then, and my uncle, now a millionaire across the street was an able seaman.
I am not saying Habitat for Humanity (or any charity) is bad, nor am I trying to discourage anyone from giving to charity. I'm pointing out that what works in a small scale charity does not work for addressing social problems at scale, and in fact is often (more often than not) harmful when done at scale. This is because the specific things that charities are good at: giving stuff to small groups of people, is not really a path forward for problems faced by society as a whole, with the exception of the problem of poor people not having enough stuff. But when you try to use this approach for, say, housing policy, then you get bad outcomes.
We have had in this country a long term, bipartisan consensus that home ownership should be subsidized. The end result is transfers from renters to home-owners, record high homeownership rates, and many people buying homes because it's a way to make leveraged bets on asset prices at taxpayer expense. There are many people who have no business owning a home but who feel they must do so in order to not be left behind in this game of leveraged bets. The result is a toxic tangle of cross-subsidies between the real-estate and financial sectors and a whole army of various parasitical industries that has sprung up to feed on these subsidies -- everything from real estate brokers, title insurers, inspectors, appraisers, a virtual caravan of people lined up at the trough of our housing subsidies, all in the name of "helping the middle class" afford homes.
When you have such a terrible problem of mispricing and people chasing after windfall gains, the idea that the industry should be approached as a type of charity is really the last thing you want to do. If you want to give money to a poor person, then by all means do so, but that's not a path forward for national housing policy.
We have had in this country a long term, bipartisan consensus that home ownership should be subsidized. The end result is transfers from renters to home-owners, record high homeownership rates, and many people buying homes because it's a way to make leveraged bets on asset prices at taxpayer expense. There are many people who have no business owning a home but who feel they must do so in order to not be left behind in this game of leveraged bets. The result is a toxic tangle of cross-subsidies between the real-estate and financial sectors and a whole army of various parasitical industries that has sprung up to feed on these subsidies -- everything from real estate brokers, title insurers, inspectors, appraisers, a virtual caravan of people lined up at the trough of our housing subsidies, all in the name of "helping the middle class" afford homes.
When you have such a terrible problem of mispricing and people chasing after windfall gains, the idea that the industry should be approached as a type of charity is really the last thing you want to do. If you want to give money to a poor person, then by all means do so, but that's not a path forward for national housing policy.
>> leveraged bets on asset prices at taxpayer expense
But doesn't the tax code distinguish between a house which houses its owner and one which doesn't? I don't think investment homes are treated tax-wise the same as normal homes. I am not aware of tax advantages being extended to investments just because those investments are houses, but maybe I am wrong?
But doesn't the tax code distinguish between a house which houses its owner and one which doesn't? I don't think investment homes are treated tax-wise the same as normal homes. I am not aware of tax advantages being extended to investments just because those investments are houses, but maybe I am wrong?
> There are many people who have no business owning a home but who feel they must do so in order to not be left behind in this game of leveraged bets.
Who has no business owning a home?
Who has no business owning a home?
* Won't stay long enough to break even on transaction costs.
* Price to rent ratio very high, just need somewhere to live.
* Achieving ownership requires moving to sprawl and taking on a ruinous car commute.
* Ownership used to justify overspending on housing because "it's an investment."
* Need to go broke to scrape together the down payment.
* Don't reliably earn enough to pay the mortgage, and no savings.
* Don't have the temperament or the means to do maintenance.
* Price to rent ratio very high, just need somewhere to live.
* Achieving ownership requires moving to sprawl and taking on a ruinous car commute.
* Ownership used to justify overspending on housing because "it's an investment."
* Need to go broke to scrape together the down payment.
* Don't reliably earn enough to pay the mortgage, and no savings.
* Don't have the temperament or the means to do maintenance.
Not if they help generate new housing, which it seems some of them do.
based on my experience volunteering for habitat, the hard part of scaling the model is finding affordable and buildable infill in cities (which is where the highest need is). it typically takes years for each project to go from ideation to purchase to design to zoning variances to enviromental review to groundbreaking. the construction itself is only on the order of months. everything that comes before actual construction is what makes it expensive.
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Is it replicable in today's yield chasing world?
And what level of gov't buy-in do you need? US Congress, State, County, City?
Was just speaking with my dad about programs - he has a ton of ideas because our hometown area is characterized as one of generational poverty and working poor.
And what level of gov't buy-in do you need? US Congress, State, County, City?
Was just speaking with my dad about programs - he has a ton of ideas because our hometown area is characterized as one of generational poverty and working poor.
What do you mean? Yield chasing usually stems from a yield starved market, and it usually results in investors expecting a lot less returns. If anything that would make it way more replicable now than it was when interest rates were presumably a lot higher.
In order for this to truly offer some of the benefits (more freedom of movement) it would have to be a national program.
The first half of the article lambasts the current conflicted interests of homeowners, who are obsessed about wealth-building through their property purchase and thus super-sensitive about increasing housing supply in their zip code. Boo wealth-minded howeowners!
But few paragraphs below under his proposal those who choose to participate are awarded “the opportunity to begin generating wealth immediately, from the minute they form their first household - a leap forward for both racial and generational equity”.
That’s a possibility, sure, but what about the property potentially losing value due to supply pressure or changing job market conditions? Aren’t the homeowners under his program as likely to develop hardcore NIMBYism as under any other financing scheme?
But few paragraphs below under his proposal those who choose to participate are awarded “the opportunity to begin generating wealth immediately, from the minute they form their first household - a leap forward for both racial and generational equity”.
That’s a possibility, sure, but what about the property potentially losing value due to supply pressure or changing job market conditions? Aren’t the homeowners under his program as likely to develop hardcore NIMBYism as under any other financing scheme?
The chief wealth generating event that most home owners experience is when the deed is yours. Then you aren't paying the bank "rent" any longer and only have to worry about property taxes and maintainence. Then you have the start of intergenerational wealth and or a hard asset you can sell for example, old people selling homes and buying a smaller they're better able to manage.
Nt saying the article is not contradictory, maybe it is, just pointing out that "wealth" is a flexible concept.
Nt saying the article is not contradictory, maybe it is, just pointing out that "wealth" is a flexible concept.
The author's proposal is laid out in his book, The Affordable City. Unlike many policy books, the table of contents, available at the publisher's site, is both detailed and descriptive, and does convey the outline of his proposals:
https://islandpress.org/books/affordable-city
The ebook is a $5 download, which I'd strongly encourage for the curious.
https://islandpress.org/books/affordable-city
The ebook is a $5 download, which I'd strongly encourage for the curious.
$3.82 for the ebook on Amazon.
Exactly, the problem is that the government is supposed to own the property, but somehow the tenant should also retain a share. If the government buys the share back, then the government basically ended up gaining net 0 dollars, the full mortgage is still due.
The only way this could work is if the property was sold to a third party and the profits of the sale were distributed according to how much you paid in, the obvious problem with this is that the government won't own the property anymore.
The only way this could work is if the property was sold to a third party and the profits of the sale were distributed according to how much you paid in, the obvious problem with this is that the government won't own the property anymore.
Thinking about the principles laid down in the article:
a) Do not require significant initial funds for buying
b) Do not have other people profit of the housing
A simple solution congruent with these principles could be:
Selling the house should be restricted to yield the amount of money you put in. This excludes money spend on repairs, etc., and is to be adjusted for inflation.
You can keep living in the house as long as you are alive. Once you are dead, you lose the house and the inheritance will be the same money you would get from selling the house/apartment under the regulated terms.
The next renter of the regulated public housing apartment would just pay rent again until they have enough in their portfolio and then stop to have to pay rent.
A simple solution congruent with these principles could be:
Selling the house should be restricted to yield the amount of money you put in. This excludes money spend on repairs, etc., and is to be adjusted for inflation.
You can keep living in the house as long as you are alive. Once you are dead, you lose the house and the inheritance will be the same money you would get from selling the house/apartment under the regulated terms.
The next renter of the regulated public housing apartment would just pay rent again until they have enough in their portfolio and then stop to have to pay rent.
> Once you are dead, you lose the house and the inheritance will be the same money you would get from selling the house/apartment under the regulated terms.
Where would this money come from, though? You only make money on the property when you sell it to someone else, so who is buying it? Not the next renter, because they are supposed to be buying into equity, not paying someone else's profit.
Where would this money come from, though? You only make money on the property when you sell it to someone else, so who is buying it? Not the next renter, because they are supposed to be buying into equity, not paying someone else's profit.
there in lies the problem - the payment in lieu of rent in the proposal is not meant to be equity, but is treated like that.
I think there's some cognitive dissonance in the proposal. The idea that you can live for free is just not possible in the modern, capitalist world. Rent is something that every entity has to pay - including owners (which is the imputed rent, or the opportunity cost of the capital placed into the building/land, or the interest payment).
If the gov't fronts the capital to build, but don't receive rent, then it's the same as tax payers footing the interest cost of that capital. So those who would be in this public-ownership housing is effectively receiving an interest free loan for the house, and their payment represents equity, and that's such a good deal that there'd be unlimited demand for this sort of housing.
I think there's some cognitive dissonance in the proposal. The idea that you can live for free is just not possible in the modern, capitalist world. Rent is something that every entity has to pay - including owners (which is the imputed rent, or the opportunity cost of the capital placed into the building/land, or the interest payment).
If the gov't fronts the capital to build, but don't receive rent, then it's the same as tax payers footing the interest cost of that capital. So those who would be in this public-ownership housing is effectively receiving an interest free loan for the house, and their payment represents equity, and that's such a good deal that there'd be unlimited demand for this sort of housing.
Yeah, this would be even worse than the debacle that led to the housing bubble in 07. This is basically letting people 'invest' in housing with zero risk. You get all the upside of housing prices increasing with no risk if house prices decrease. This means there is zero downward pressure on housing prices, which is going to lead to even worse housing prices in the future.
You can't solve skyrocketing housing prices by simply increasing access to capital... that is just going to exacerbate the problem
You can't solve skyrocketing housing prices by simply increasing access to capital... that is just going to exacerbate the problem
Case in point: Student loans
The interesting problems in a price cap system are about allocation. You’ve torn down one way of deciding who gets the house next. What do you replace it with?
Do the neighbors vote on their next neighbor? The city council? An impersonal bureaucracy? What factors does it consider? Are there priority quotas for people meeting certain criteria? What criteria? How many people? Who decides? Who decides if an individual meets the criteria? How do we keep them honest? Can their decisions be appealed, can normal people afford to appeal them?
I don’t think it’s impossible to come up with good answers here, but that’s the work. The mechanism design here is extremely important, and it’s not “simple.”
Do the neighbors vote on their next neighbor? The city council? An impersonal bureaucracy? What factors does it consider? Are there priority quotas for people meeting certain criteria? What criteria? How many people? Who decides? Who decides if an individual meets the criteria? How do we keep them honest? Can their decisions be appealed, can normal people afford to appeal them?
I don’t think it’s impossible to come up with good answers here, but that’s the work. The mechanism design here is extremely important, and it’s not “simple.”
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There's an element of rental housing which is an act of pure consumption. Real estate taxes (either paid or foregone), maintenance supplies, maintenance labor, common area utilities, paying the bond used to build the building, insurance, etc.
Plus, there is a notion in the article that this would be an incoming-producing asset and that income is presumably coming from the rents paid. Unless this is a massive Ponzi scheme, there's consumption going on (and therefore you're not building equity with all of the rent payments).
There's no realistic way you're going to have 100% (and likely not even 50%) of a rental payment going to building equity.
Plus, there is a notion in the article that this would be an incoming-producing asset and that income is presumably coming from the rents paid. Unless this is a massive Ponzi scheme, there's consumption going on (and therefore you're not building equity with all of the rent payments).
There's no realistic way you're going to have 100% (and likely not even 50%) of a rental payment going to building equity.
I think it's closer to a
1) You take a bunch of public funds and buy houses.
2) You rent those houses out at market rents
3) You pay off all expenses with the rent
4) You take what's left over (the profit) and use that to increase the renters ownership share, and pay a dividend to other people who have the ownership share
It's just a super weird inefficient way to give renters money. Instead you should just give them money...
1) You take a bunch of public funds and buy houses.
2) You rent those houses out at market rents
3) You pay off all expenses with the rent
4) You take what's left over (the profit) and use that to increase the renters ownership share, and pay a dividend to other people who have the ownership share
It's just a super weird inefficient way to give renters money. Instead you should just give them money...
A similar program on a municipal level might look something like this:
1) Public funds provide capital to build or buy a dwelling. Public owns dwelling outright.
2) Individuals rent dwelling at market rate. Part of this money goes towards paying off inflation and the time value of money (equivalent to paying down mortgage interest), part goes to a fund in the individual's name (equivalent to paying down mortgage principal).
3a) Saved funds reach price paid for home. Ownership is transferred, public keeps the funds.
3b) Individuals leave early. The chunk of their payments that went to their fund is refunded.
The proposal in the article looks like it's much more ambitious, and designed as a national program. This allows the fund to follow the individual, instead of being tied to a property. Instead of having the refund/buy option, it always pays back a dividend. So if you've paid enough rent that you're getting $200/month back, and you move, you still just get $200/month back.
1) Public funds provide capital to build or buy a dwelling. Public owns dwelling outright.
2) Individuals rent dwelling at market rate. Part of this money goes towards paying off inflation and the time value of money (equivalent to paying down mortgage interest), part goes to a fund in the individual's name (equivalent to paying down mortgage principal).
3a) Saved funds reach price paid for home. Ownership is transferred, public keeps the funds.
3b) Individuals leave early. The chunk of their payments that went to their fund is refunded.
The proposal in the article looks like it's much more ambitious, and designed as a national program. This allows the fund to follow the individual, instead of being tied to a property. Instead of having the refund/buy option, it always pays back a dividend. So if you've paid enough rent that you're getting $200/month back, and you move, you still just get $200/month back.
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Sounds vaguely similar (but not identical?) to the UK's shared ownership scheme:
https://www.sharetobuy.com/guides-and-faqs/what-is-shared-ow...
"The purchaser pays a mortgage on the share they own, and pays rent to a housing association on the remaining share. [...] The purchaser has the option to increase their share during their time in the property via a process known as ‘staircasing’, and in most cases can staircase all the way to 100%."
https://www.sharetobuy.com/guides-and-faqs/what-is-shared-ow...
"The purchaser pays a mortgage on the share they own, and pays rent to a housing association on the remaining share. [...] The purchaser has the option to increase their share during their time in the property via a process known as ‘staircasing’, and in most cases can staircase all the way to 100%."
Isn't this limited to one residence per person? So if you do sell it or rent it out, you still need another house, which you won't be able to obtain using this scheme.
When you sell the outstanding loan is paid off by the purchase price, the lender and owner take their respective share of the price
The new landlord would raise rents, because he has to get his money back somehow. It would be better to just let the government pay the full mortgage and pass on the costs for the first 30 years and then lower rents to rock bottom prices based on maintenance costs after it has been paid off.
What is more likely to happen is that the housing association that helps with the mortgage then offers it to someone else who is in need of this type of social housing. The risk becomes less for the housing association each time as more of the principal is paid off. But even when it is paid off they can offer the loan service to new buyers.
This happens frequently in new build housing in the UK but it is not without its problems.
This happens frequently in new build housing in the UK but it is not without its problems.
IDK but property rights can be modified, e.g. to exclude alienation (so can't be sold or inherited). You only get a lifetime right to occupy. Then, can be sold to the next person.
Nicely, this wouldn't address intergenerational poverty, nor threaten the landed gentry.
Nicely, this wouldn't address intergenerational poverty, nor threaten the landed gentry.
"those losses aren’t equitably distributed, either: Nearly 2 million mortgages are underwater in the U.S., and they’re disproportionately concentrated in Black and Latino communities. Tenants in coastal cities, meanwhile, know the pain of forking over more and more rent every year, unable to save for a down payment and living at the mercy of sometimes unscrupulous landlords."
What on earth does not equitable mean in terms of distributing losses?
Secondly "living at the mercy" hold on, renters aren't tenant farmers who can't leave their lord's land. People do actually choose to live in expensive rented accommodation. They make the choice that the property location etc is worth more than the cash, to them.
What on earth does not equitable mean in terms of distributing losses?
Secondly "living at the mercy" hold on, renters aren't tenant farmers who can't leave their lord's land. People do actually choose to live in expensive rented accommodation. They make the choice that the property location etc is worth more than the cash, to them.
People cannot actually choose the location, without giving up their work.
"You can only find work in a big metropolitan center that demands 60% of your salary in rent? Though luck..."
Let's say that you work in London... if you are 1h away from your work, you're still likely in zone 3 or 4, which is pretty expensive.
Your choices then are: a 1h30/2h commute (each way) or giving up on having a place only for yourself, and start flatsharing
"You can only find work in a big metropolitan center that demands 60% of your salary in rent? Though luck..."
Let's say that you work in London... if you are 1h away from your work, you're still likely in zone 3 or 4, which is pretty expensive.
Your choices then are: a 1h30/2h commute (each way) or giving up on having a place only for yourself, and start flatsharing
Yes, we should probably treat land as much more of a public good, especially in cities. The true value of land has much more to do with the services nearby: jobs, shops, parks, emergency services. The majority of tax should be based on the land value, independent of the cost of structures built on that land.
A single-family home (whether it be a shack or a million dollar mansion) in a city center with high land value is depriving the city of a lot of potential utility and should be taxed in proportion to that.
A single-family home (whether it be a shack or a million dollar mansion) in a city center with high land value is depriving the city of a lot of potential utility and should be taxed in proportion to that.
You might find Georgism [0] interesting. Its tenets include a (steep) land value tax that proponents believe would sort out the 'best use' of land in city centers. It's a compelling idea, but unfortunately the driving force behind American government seems to be once you have something (property, a business, etc...) nobody can do anything that adversely affects it. And Americans (over age 40) already own a LOT of property and would not take kindly to new taxes on it.
[0] https://en.wikipedia.org/wiki/Georgism#Main_tenets
[0] https://en.wikipedia.org/wiki/Georgism#Main_tenets
This falls in line with the old economic school of how value is created, which fell in disfavor because it didn’t sit right with the upper classes, for clear reasons.
It seems reasonable enough to me, but I don't own any land. I think I'm realistic enough to admit that if I had been born 35 years earlier and had two homes that I paid off in my 40's and had appreciated 350% since then, I would probably feel differently about it. It's a tough nut to crack, for sure.
If you're referencing the LTV, no it doesn't
No, I am referencing the Value Of Everything by M.Mazzucato.
Land values are already captured in property taxes. There's certainly places where property taxes are too low and not doing enough to encourage better usage of the land, but that's straightforward to solve (though admittedly often not that easy politically)
Partially, but property taxes discourage improving the structures on the land as the property tax also increases based on the value of the structure. This is generally the opposite of what want. Renovations, upkeep, and property improvements are good things so why penalize them?
Property tax has horrid incentives. We want people to build more on expensive land, not less. LVT forces multi unit housing on prime spots.
Until property taxes stop taking into account the value of the structure, they are not equivalent at all.
> Yes, we should probably treat land as much more of a public good
This is the central idea of Georgism, and it extends neatly to other things which are not the product of anyone's labour, like natural resources, pollution, or even issuance of credit (currently the banks have a monopoly on the power to create money/credit).
It's all very interesting, a nice balance which retains the good features of markets but prevents or at least limits the harmful stuff: rent-seeking leeches, pure speculation divorced from fundamentals, etc.
> especially in cities
This reminds me of the “Lockean proviso”:
Nor was this appropriation of any parcel of land, by improving it, any prejudice to any other man, since there was still enough and as good left, and more than the yet unprovided could use.
That is to say, taking natural resources, labouring, and keeping the profits of that activity, is only legitimate insofar as there is still “enough of it, and as good, in left in common for others”.
> The true value of land has much more to do with the services nearby
Oh absolutely! If a road is built, shops, the neighbourhood improved, schools, businesses, jobs, and therefore the desirability of your land increases... it's you that has to pay society back for what it has given you! It's not the resale value of your land that should rise.
This is the central idea of Georgism, and it extends neatly to other things which are not the product of anyone's labour, like natural resources, pollution, or even issuance of credit (currently the banks have a monopoly on the power to create money/credit).
It's all very interesting, a nice balance which retains the good features of markets but prevents or at least limits the harmful stuff: rent-seeking leeches, pure speculation divorced from fundamentals, etc.
> especially in cities
This reminds me of the “Lockean proviso”:
Nor was this appropriation of any parcel of land, by improving it, any prejudice to any other man, since there was still enough and as good left, and more than the yet unprovided could use.
That is to say, taking natural resources, labouring, and keeping the profits of that activity, is only legitimate insofar as there is still “enough of it, and as good, in left in common for others”.
> The true value of land has much more to do with the services nearby
Oh absolutely! If a road is built, shops, the neighbourhood improved, schools, businesses, jobs, and therefore the desirability of your land increases... it's you that has to pay society back for what it has given you! It's not the resale value of your land that should rise.
Yeah you can buy your dream house in the middle of nowhere for 200k but if you're a teacher, nurse or electrician job opportunities are likely scarce.
People don't just live in cities for the opera.
You listed 3 occupations where opportunities aren’t that scarce and every town needs those people.
At what point can we acknowledge the harsh reality of “adapt, move, or perish”? If your choices and circumstances can’t add up to a positive cash flow, there is no obligation for others to sacrifice their net productive choices so others can enjoy their net unproductive choices. We don’t live in a post scarcity Utopia; why do some strive so hard to cancel this truth?
We need people to live where the jobs are. Yes you can also move jobs but that’s basically the why. Also you have a higher probability of advancing from poverty to middle class or even high income living in the Bay Area.
> why do some strive so hard to cancel this truth?
to equalize the outcomes based on group identities, based on the concept that identity is all that matters and choices, hard work and circumstances don't
to equalize the outcomes based on group identities, based on the concept that identity is all that matters and choices, hard work and circumstances don't
There is usually more than one rental available withing commuting distance of a given job.
Name one career where rent is 60% of the income yet only exists in the largest cities.
> Name one career where rent is 60% of the income yet only exists in the largest cities.
Suggesting that there are careers that only exist in the largest cities seems like an odd thing for you to introduce into the conversation.
Suggesting that there are careers that only exist in the largest cities seems like an odd thing for you to introduce into the conversation.
I think the point is that paying 60% of income in rent is unviable. You need to find a different job, a cheaper apartment, or move somewhere else. Maybe all of the above.
> paying 60% of income in rent is unviable. You need to find a different job
I think you mean you need to dedicate career-level resources to locating a job that pays a meaningful amount more than the one you have - then beating out the hundreds of other job applicants while assisting your kids thru 4 hours of evening homework, battling a chronic health condition, performing routine household upkeep and cleaning, spending 8 hours a week trying to turn health insurance into usable appointments and the several other hours of mandatory obligations.
This assumes we are considering the sort of scenarios faced by typically, struggling folks - and we aren't treating challenges as if they exist in isolation.
> a cheaper apartment,
After looking you find an absurdly small number and their condition is substandard at best. The roaches, noise and maladjusted neighbors guarantee you won't get more than 5 hours sleep most nights. Moving into one of them would cost $4k out of pocket after all of the various expenses and deposits are totaled up.
> or move somewhere else.
Folks who have enough $$$$$$.$$ to wholly fund a move to another city probably aren't struggling to the point where they need to move.
I think you mean you need to dedicate career-level resources to locating a job that pays a meaningful amount more than the one you have - then beating out the hundreds of other job applicants while assisting your kids thru 4 hours of evening homework, battling a chronic health condition, performing routine household upkeep and cleaning, spending 8 hours a week trying to turn health insurance into usable appointments and the several other hours of mandatory obligations.
This assumes we are considering the sort of scenarios faced by typically, struggling folks - and we aren't treating challenges as if they exist in isolation.
> a cheaper apartment,
After looking you find an absurdly small number and their condition is substandard at best. The roaches, noise and maladjusted neighbors guarantee you won't get more than 5 hours sleep most nights. Moving into one of them would cost $4k out of pocket after all of the various expenses and deposits are totaled up.
> or move somewhere else.
Folks who have enough $$$$$$.$$ to wholly fund a move to another city probably aren't struggling to the point where they need to move.
> What on earth does not equitable mean in terms of distributing losses?
That is literally explained in your quote. An inequitable distribution is one where a higher percentage of individuals in specific minority groups suffer losses compared to society as a whole.
That is literally explained in your quote. An inequitable distribution is one where a higher percentage of individuals in specific minority groups suffer losses compared to society as a whole.
> An inequitable distribution is one where a higher percentage of individuals in specific minority groups suffer losses compared to society as a whole.
I think this would lead to regression to the mean irrespective of the level of personal effort involved. Anything that deviates in outcome needs to be force-equalized.
I think this would lead to regression to the mean irrespective of the level of personal effort involved. Anything that deviates in outcome needs to be force-equalized.
That explains how it is disproportionate but not how the mechanism treats them unequally. Redlining for instance made minorities far less likely to obtain loans and thus kept otherwise qualified people from building equity.
Also distribution as unequal could be taken like taxes and a negative allocated to the unfortunate instead of the results forming the distribution.
Also distribution as unequal could be taken like taxes and a negative allocated to the unfortunate instead of the results forming the distribution.
Isn't this what terrible public housing is already? Could it be less terrible or would it always devolve into a housing caste system because middle-/upper-classes would never use it? Set-asides for "affordable housing" in new developments are an absolute joke because there are very few units, they often have separate "servant-like" entrances, and may not be treated equally compared to other residents.
Also, the root cause isn't housing prices, it's a lack of supply because of NIMBYs, a lack of fast/cheap transportation, developing for maximum traffic/commute times like LA, and a lack of development around walkable/self-contained living areas.
Also, the root cause isn't housing prices, it's a lack of supply because of NIMBYs, a lack of fast/cheap transportation, developing for maximum traffic/commute times like LA, and a lack of development around walkable/self-contained living areas.
The root cause is way too little development relative to demand, orchestrated via zoning regulations. Wikipedia spells this out in detail for San Francisco [1].
> Since the 1960s, San Francisco and the surrounding Bay Area have enacted strict zoning regulations. Among other restrictions, San Francisco does not allow buildings over 40 feet tall in most of the city, and has passed laws making it easier for neighbors to block developments. Partly as a result of these codes, from 2007 to 2014, the Bay Area issued building permits for only half the number of needed houses, based on the area's population growth. At the same time, there has been rapid economic growth of the high tech industry in San Francisco and nearby Silicon Valley, which has created hundreds of thousands of new jobs.
(Supply << Demand) -> Price goes up.
If we're to solve the housing affordability crisis, city councils simply need to drop onerous zoning regulations and permit construction such that supply can meet demand.
Anything short of this is just a beat-around-the-bush bandaid that hasn't and won't achieve anything. For instance, rent control. What a regressive concept, with tons of unintended consequences.
[edit] for real do you think there'd be a housing shortage or affordability crisis if the entire southern and western 3/4 of San Francisco was allowed to build up from 4 stories to 6? Basically everything other than districts 3 and 6. [2] That'd easily add 50% more housing.
[1] https://en.wikipedia.org/wiki/San_Francisco_housing_shortage
[2] https://voterguide.sfelections.org/en/san-francisco’s-superv...
> Since the 1960s, San Francisco and the surrounding Bay Area have enacted strict zoning regulations. Among other restrictions, San Francisco does not allow buildings over 40 feet tall in most of the city, and has passed laws making it easier for neighbors to block developments. Partly as a result of these codes, from 2007 to 2014, the Bay Area issued building permits for only half the number of needed houses, based on the area's population growth. At the same time, there has been rapid economic growth of the high tech industry in San Francisco and nearby Silicon Valley, which has created hundreds of thousands of new jobs.
(Supply << Demand) -> Price goes up.
If we're to solve the housing affordability crisis, city councils simply need to drop onerous zoning regulations and permit construction such that supply can meet demand.
Anything short of this is just a beat-around-the-bush bandaid that hasn't and won't achieve anything. For instance, rent control. What a regressive concept, with tons of unintended consequences.
[edit] for real do you think there'd be a housing shortage or affordability crisis if the entire southern and western 3/4 of San Francisco was allowed to build up from 4 stories to 6? Basically everything other than districts 3 and 6. [2] That'd easily add 50% more housing.
[1] https://en.wikipedia.org/wiki/San_Francisco_housing_shortage
[2] https://voterguide.sfelections.org/en/san-francisco’s-superv...
I think there is still a place for government action to help prevent historic populations of a community from getting displaced.
But those programs should be implemented as subsidies, not price controls! The only reason we're so reliant on the latter is it is more easy politically to put the costs on suppliers and hope the electorate doesn't notice that you're actually exacerbating the problem.
But those programs should be implemented as subsidies, not price controls! The only reason we're so reliant on the latter is it is more easy politically to put the costs on suppliers and hope the electorate doesn't notice that you're actually exacerbating the problem.
> But those programs should be implemented as subsidies, not price controls!
Subsidies for historic populations without price controls would be a windfall for landlords, and an accelerant to runaway general unaffordability. You could probably split the difference with weaker rent controls and subsidies that make it look like stronger rent control from the renters side, which might mitigate the worst problems of either policies (albeit, at thr cost of combining thr problems of both.)
What would probably be better is to find a way to lean into displacement, or at least accept it, while giving displaced residents a stake in the unleashed value.
Strong rent control but with a buyout option where the the bought-out renter gets some share of the excess (compared to what they could have been charged with rent control) rent over a specified period with some floor might be an option.
Subsidies for historic populations without price controls would be a windfall for landlords, and an accelerant to runaway general unaffordability. You could probably split the difference with weaker rent controls and subsidies that make it look like stronger rent control from the renters side, which might mitigate the worst problems of either policies (albeit, at thr cost of combining thr problems of both.)
What would probably be better is to find a way to lean into displacement, or at least accept it, while giving displaced residents a stake in the unleashed value.
Strong rent control but with a buyout option where the the bought-out renter gets some share of the excess (compared to what they could have been charged with rent control) rent over a specified period with some floor might be an option.
Subsidies for historic populations without price controls would be a windfall for landlords
This is specifically addressed in the introduction to The Affordable City, and is why "Supply, Stability, and Subsidy" are a three-point policy.
Without supply, yes, subsidies are swallowed up by landlords, and stability (tenants' rights measures) benefit a small minority. Without subsidy, those temporarily or permanently disadvantaged still lack housing or assurance of it. And without stability, tenants remain at risk of being abused by landlords.
(If this sounds like "please read the book", it's because it is. I'm not yet sold, but the proposals seem far-better fledged than most I've seen.)
This is specifically addressed in the introduction to The Affordable City, and is why "Supply, Stability, and Subsidy" are a three-point policy.
Without supply, yes, subsidies are swallowed up by landlords, and stability (tenants' rights measures) benefit a small minority. Without subsidy, those temporarily or permanently disadvantaged still lack housing or assurance of it. And without stability, tenants remain at risk of being abused by landlords.
(If this sounds like "please read the book", it's because it is. I'm not yet sold, but the proposals seem far-better fledged than most I've seen.)
> Subsidies for historic populations without price controls would be a windfall for landlords
How is it a windfall for landlords? If the rent prices are going up, they will be making the money regardless of whether the renter is paying for it or the government is paying for some of it.
If your point is that a subsidy will shift demand and increase the price, that is exactly what we want! A price signal to the market to build more housing to accommodate everyone who wants to live there including displaced communities!
> lean into displacement
What does this mean? I think there is some level of societal interest in preventing displacement, there are negative externalities from displacement that the market can't properly price in.
How is it a windfall for landlords? If the rent prices are going up, they will be making the money regardless of whether the renter is paying for it or the government is paying for some of it.
If your point is that a subsidy will shift demand and increase the price, that is exactly what we want! A price signal to the market to build more housing to accommodate everyone who wants to live there including displaced communities!
> lean into displacement
What does this mean? I think there is some level of societal interest in preventing displacement, there are negative externalities from displacement that the market can't properly price in.
> How is it a windfall for landlords? If the rent prices are going up, they will be making the money regardless of whether the renter is paying for it or the government is paying for some of it.
Subsidies for a population that otherwise couldn’t afford it will accelerate the rate at which market price increases, especially since those subsidies will also increase as the market price does. It’s like student loans and college prices, but worse.
Subsidies for a population that otherwise couldn’t afford it will accelerate the rate at which market price increases, especially since those subsidies will also increase as the market price does. It’s like student loans and college prices, but worse.
> tudent loans and college prices, but worse.
It's not worse if there is cost-sharing.
And as I said above,
> that is exactly what we want! A price signal to the market to build more housing to accommodate everyone who wants to live there including displaced communities!
Inevitably, trying to keep displacement from happening is going to increase prices for newcomers. The question is whether we want to do that in a way that incentivizes increasing supply or one that keeps people out.
It's not worse if there is cost-sharing.
And as I said above,
> that is exactly what we want! A price signal to the market to build more housing to accommodate everyone who wants to live there including displaced communities!
Inevitably, trying to keep displacement from happening is going to increase prices for newcomers. The question is whether we want to do that in a way that incentivizes increasing supply or one that keeps people out.
> A price signal to the market to build more housing
And, as basic economics will tell you, sending such a signal to a market is a windfall for people that already own the underlying asset in that market--i.e., landlords. They get a windfall because they bought the asset when the market undervalued it (because the price signal was not being sent).
And, as basic economics will tell you, sending such a signal to a market is a windfall for people that already own the underlying asset in that market--i.e., landlords. They get a windfall because they bought the asset when the market undervalued it (because the price signal was not being sent).
Sure, but if paired with dezoning, the loss due to the elimination of rent-seeking through constricted suply would likely be larger decrease for landlords than the increase from demand surge from the subsidy.
> Sure, but if paired with dezoning, the loss due to the elimination of rent-seeking through constricted suply would likely be larger decrease for landlords than the increase from demand surge from the subsidy.
Landlords benefit from dezoning; increased density increases the rent value realized per unit of land area, even if it might decrease it per unit of living area, even without subsidies (and the slumlords that go whole hog on density will make those islands of private communities that don’t even more valuable, so long as the crime and other unattractive effects of the former can be kept out of sight, out of mind, from the latter.
The people opposed to dezoning aren’t landlords, they are residents who prefer low density conditions.
Landlords benefit from dezoning; increased density increases the rent value realized per unit of land area, even if it might decrease it per unit of living area, even without subsidies (and the slumlords that go whole hog on density will make those islands of private communities that don’t even more valuable, so long as the crime and other unattractive effects of the former can be kept out of sight, out of mind, from the latter.
The people opposed to dezoning aren’t landlords, they are residents who prefer low density conditions.
IIRC, by modern economists that inflation doesn't work like that in the real world. Real estate is based primarily on desirability, the order-of-magnitudes of wealth influx, and comparables. Overall, housing prices are uninvolved in changing inflation, but mostly externally-caused inflation changes housing prices slightly.
> I think there is some level of societal interest in preventing displacement,
Why?
‘Historic populations’ is a euphemism for Black in most cases.
In most large cities I’ve lived in, there is typically a section of town plagued by bad schools, high crime, bad infrastructure, and crumbling residences, and it is usually monoethnic.
Why is this a good thing?
It seems that whites in the more affluent areas and suburbs are willing to throw a lot of money at these ‘historic’ populations so that the residents won’t move to their side of town.
Kinda perverse.
‘Ethnic’ neighborhoods in large cities are quaint. Sometimes they become tourist attractions. But, in large part, many are simply ghettos and the faster the ethnicity is integrated into the larger housing market, the better for everyone.
Why?
‘Historic populations’ is a euphemism for Black in most cases.
In most large cities I’ve lived in, there is typically a section of town plagued by bad schools, high crime, bad infrastructure, and crumbling residences, and it is usually monoethnic.
Why is this a good thing?
It seems that whites in the more affluent areas and suburbs are willing to throw a lot of money at these ‘historic’ populations so that the residents won’t move to their side of town.
Kinda perverse.
‘Ethnic’ neighborhoods in large cities are quaint. Sometimes they become tourist attractions. But, in large part, many are simply ghettos and the faster the ethnicity is integrated into the larger housing market, the better for everyone.
Those neighborhoods are often targeted for redevelopment the moment the ghetto starts improving, and as the ethnic residents are often renters, they have little recourse when it begins.
See: gentrification.
See: gentrification.
> If your point is that a subsidy will shift demand and increase the price, that is exactly what we want! A price signal to the market to build more housing to accommodate everyone who wants to live there including displaced communities!
As long as that same government is using law (ie. violence) to prevent building more housing, no amount of subsidies can be effective.
What do you intend landlords do? Hire an army to defend cheap housing from the government?
As long as that same government is using law (ie. violence) to prevent building more housing, no amount of subsidies can be effective.
What do you intend landlords do? Hire an army to defend cheap housing from the government?
Yes, subsidies should be paired with dezoning.
Yes, law includes the threat of coercion, I don't see what adding that little tidbit does to improve your point.
Yes, law includes the threat of coercion, I don't see what adding that little tidbit does to improve your point.
Isn't it typically a windfall for richer people posing as poorer and clever poorer people for improved survival who can utilize or resell earmarked subsidies meant for extremely struggling people?
Welfare fraud is one of those instance of things where it is really salacious so people love reading about it in the media but is not actually that common.
Rent control laws are a different beast altogether because they are not means tested typically.
Rent control laws are a different beast altogether because they are not means tested typically.
Its simple - tax landlordism out of viability.
I don't want to own a home. I don't want to have to sell a house/apartment when I move and I don't want to be responsible for it in the meantime.
Cool, then let the government do it. Your "rent" can even build equity in such a scheme.
How do people who can't afford to buy then survive? I'm in NZ and we've just seen laws introduced that makes being a landlord more expensive and unsurprisingly it's seen rental increases as a result.
You don't make landlordism more expensive. You make it more difficult and less profitable.
House prices will go down, and more people will be able to buy. For others, there is public-ownership rental and even public housing (that would be of much higher quality than today)
House prices will go down, and more people will be able to buy. For others, there is public-ownership rental and even public housing (that would be of much higher quality than today)
> You don't make landlordism more expensive. You make it more difficult and less profitable.
How is that any different? If it's more difficult then it inherently consumes more time and/or money - given that money is (arguably) how we measure the value of labour I don't see any way of escaping this.
How is that any different? If it's more difficult then it inherently consumes more time and/or money - given that money is (arguably) how we measure the value of labour I don't see any way of escaping this.
Not if you bound the profit. Then it consumes more time without yielding more money, and is thus less interesting of a proposition -> property values go down. You're assuming an equilibrium return on investment (and unchanging prices), and a perfectly stable market, here.
Yeah, I guess that's the logical conclusion. I'd naively expect that the decreased profitability of an asset would decrease its market value, but the owner, banks and government are all interested in keeping the prices high, so instead of offloading less lucrative properties at cheaper prices, the rents get increased :/
I've rented most of my adult life, never did the landlords not be assholes. There must be a better way.
> I'd naively expect that the decreased profitability of an asset would decrease its market value
It actually does (kind of), the problem is that the gap between "not profitable" and "affordable" is a chasm. Someone who is currently paying $350/week rent with minimal savings behind them (which statistically is an optimistic assumption) is not going to be able to find a 10% (or maybe higher) deposit on a $500,000+ property.
The other issue is that right now we're experiencing massive inflation of house prices. Median house value in NZ increased 24% in March - that means you'd need to save around $2000/week just to not lose ground. It's madness, I'm glad I bought at what I thought was the top of the market in March 2000.
It actually does (kind of), the problem is that the gap between "not profitable" and "affordable" is a chasm. Someone who is currently paying $350/week rent with minimal savings behind them (which statistically is an optimistic assumption) is not going to be able to find a 10% (or maybe higher) deposit on a $500,000+ property.
The other issue is that right now we're experiencing massive inflation of house prices. Median house value in NZ increased 24% in March - that means you'd need to save around $2000/week just to not lose ground. It's madness, I'm glad I bought at what I thought was the top of the market in March 2000.
I have no idea. It seems like, in the US with spotty social assistance, people aren't able to conduct typical investments and savings for retirement and spend much more at convenience businesses for life's essentials such that they become trapped in poverty / economic immobility.
Spend the money on new houses without asking anyone for permission. (Specially not home owners who financially benefit from homelessness.)
You could even do a construction project and bill the land lords for that directly. In an even crazier universe they would get something in return for the [forced] investment.
You could even do a construction project and bill the land lords for that directly. In an even crazier universe they would get something in return for the [forced] investment.
That doesn't make sense. You only need to tax the appreciation of the land value via land value taxes. Building housing and renting them out is economically productive, we want more of that but property taxes are paid on the productive part. This makes land value appreciation a far more reliable way of earning money even though you are doing absolutely nothing that is economically productive.
...and what? What do you expect that to do?
The supply of landlords is not fixed. If subsidies make it attractive for suppliers to offer housing, more housing will be built and the prices they can demand will fall. Subsidies naturally give rise to a glut and underconsumption which is exactly what you want.
Subsidies and not price controls or lowest cost junk housing unsuitable for livable communities.
> The root cause is way too little development relative to demand, and zoning regulations.
Trying to mimic 1960s TV neighborhoods thru single use zoning regs has not served our country well.
Trying to mimic 1960s TV neighborhoods thru single use zoning regs has not served our country well.
I’m pretty sure a lot of people enjoy living in those neighborhoods. Surely if no one actually liked living in those neighborhoods it wouldn’t still be the ideal people strive for.
That's fine, people can like what they like. One of the best parts of my life was living in a duplex built in the 1930s close to downtown. It's hard and increasingly expensive to live in those around here because they have been illegal to build in most of the city for almost a century.
We do not have to ban single family homes. We do have to stop banning everything else.
We do not have to ban single family homes. We do have to stop banning everything else.
Yeah this is a big problem. Demographics have changed. There are more old people who don't need 3 bedrooms and a big garden. Single person households have increased- in the 1960s everyone married and started a family in their twenties and divorce was pretty rare.
We shouldn't build houses for a society that doesn't exist anymore.
We shouldn't build houses for a society that doesn't exist anymore.
Yes but people like living in certain neighborhoods not just certain homes.
Don’t get me wrong. There are plenty of people in the burbs living an idilic life of winding roads and manicured lawns just the same as the people who enjoy rural, small town, or city life but there’s a huge group of people who are forced via their life circumstances to go to where there’s work and where they can afford.
This doesn't make any sense, if people like those neighborhoods, why would they pay for housing whose value is based around what its potential rent income would be if zoning was not restricted.
The fact that you can (eventually) build a 2 story apartment building on that plot of land is already priced in.
If you like it this way then enjoy the needless suffering and economic inefficiency, it can only get worse. Turning one city into an "ugly" 10 million metropolis could have spared a dozen other cities.
The fact that you can (eventually) build a 2 story apartment building on that plot of land is already priced in.
If you like it this way then enjoy the needless suffering and economic inefficiency, it can only get worse. Turning one city into an "ugly" 10 million metropolis could have spared a dozen other cities.
To quote what all of them are saying...
>Turning one city into an "ugly" 10 million metropolis could have spared a dozen other cities.
"Great, turn one city like that and spare the rest... just not in my city.
>Turning one city into an "ugly" 10 million metropolis could have spared a dozen other cities.
"Great, turn one city like that and spare the rest... just not in my city.
I like a lot of things. Most of them don't need to be legally enforced by the government. I just freely choose the things I like and people who like differently choose differently.
Why does one specific form of housing need to be legally required instead of just letting people build the type of housing that they want?
Why does one specific form of housing need to be legally required instead of just letting people build the type of housing that they want?
The difference is that people don't care about one form of housing... they care about one form of neighborhood which necessarily includes many houses.
It still seems like you are forcing your preference on others.
I feel like you could justify all sorts of weird stuff this way. Smoking was popular. Obesity is popular and its popularity is increasing over time. Destroying the planet with fossil fuels is something everybody wants to do. These are ideals everybody is striving for.
Playing with puppies is popular, getting an A in class is popular. These are all ideals everybody is striving for.
I don't think that this argument really addresses the point that vilifying something might be hurting the problem more.
I don't think that this argument really addresses the point that vilifying something might be hurting the problem more.
Maybe, but some don't and are only there because 99% of the school-quality/house-price/distance-to-work sweet spot is in winding-road McMansion neighborhoods, so that's basically the only option.
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I wish there was some way to fix the incentives so people valued growth properly.
Currently the incentives are broken. If you buy in you’re incentivized to limit any future growth to capitalize your ownership of restricted supply. This takes many forms, but zoning, “neighborhood character”, “environmentalism”, noise, shadows, etc. - it’s all about supply restriction.
If there was a way for everyone to get the increased value that came from growth more explicitly then I think the political incentives would shift. You’d still have to overcome some status quo bias, but at least there wouldn’t be a direct economic incentive for owners to restrict supply.
No idea how something like this could be structured.
At least new RHNA numbers seem good, I’d also like to see something that revokes prop13 protection for localities that block new housing. If you’re going to fuck everyone else over, you should at least have to pay for it.
Currently the incentives are broken. If you buy in you’re incentivized to limit any future growth to capitalize your ownership of restricted supply. This takes many forms, but zoning, “neighborhood character”, “environmentalism”, noise, shadows, etc. - it’s all about supply restriction.
If there was a way for everyone to get the increased value that came from growth more explicitly then I think the political incentives would shift. You’d still have to overcome some status quo bias, but at least there wouldn’t be a direct economic incentive for owners to restrict supply.
No idea how something like this could be structured.
At least new RHNA numbers seem good, I’d also like to see something that revokes prop13 protection for localities that block new housing. If you’re going to fuck everyone else over, you should at least have to pay for it.
There already is value given for not limiting growth - it is called growth and absence of pronlems. The main issue is that they don't see them.
One dumb top of the head idea is a new development "tax" to existing owners within a certain radius. It is pretty perverse in its self. Hopefully it would be offset by absense of NIMBY costs. Probably not the best concept by any means and had loads of flaws I haven't noticed but it could technically help.
One dumb top of the head idea is a new development "tax" to existing owners within a certain radius. It is pretty perverse in its self. Hopefully it would be offset by absense of NIMBY costs. Probably not the best concept by any means and had loads of flaws I haven't noticed but it could technically help.
San Francisco housing isn’t going to change until a natural forcing function like a large earthquake destroys a significant amount of the city.
The pandemic was a natural forcing function that brought rents down significantly.
The pandemic was a natural forcing function that brought rents down significantly.
Weird, I wonder what happened in America in the 1960s that would make so many people try to prevent others from moving into their neighborhoods.
The real root cause is that everyone wants to live (for obvious reasons) in places where housing supply is constrained like SF, LA, or NYC. Home ownership is easy in places like Detroit or Oklahoma boonies, but unsurprisingly no one wants to go there.
Instead of cramming more people onto the same set of square mikes, how about we develop more (non coastal) places for people to aspire moving to instead?
Not everyone has to or should move to California.
Instead of cramming more people onto the same set of square mikes, how about we develop more (non coastal) places for people to aspire moving to instead?
Not everyone has to or should move to California.
Those other locations have similar problems at lower price-levels: relative to incomes you still have to get to moderately large commute distances to get affordable housing.
One improvement would effective transportation that makes the outlying locations nearly as attractive for commuting purposes.
One improvement would effective transportation that makes the outlying locations nearly as attractive for commuting purposes.
Housing affordability and precarity are widespread problems. $/ft^2 an $/br is high on the coasts. Rent:income and evictions/10k are high throughout much of the U.S.
No, the issue is housing supply is arbitrarily and artificially constrained in these areas. It's vastly more efficient to simply concentrate housing and development in a small area rather than sprawling into undesirable areas.
> Set-asides for "affordable housing" in new developments are an absolute joke because there are very few units, they often have separate "servant-like" entrances, and may not be treated equally compared to other residents.
I’ve lived in 80/20 buildings. None of the things you list make them a “joke” except the number of units.
Yes, the 20% apartments aren’t as nice, don’t get to use the gym for free, and in a couple of cases had a separate entrance.
So what?!? They were still massively subsidized and had giant lotteries for people that would have loved to get them.
No, outrage mongers notwithstanding, the real issue is that the programs are incredibly inefficient. The builders get millions of dollars of tax benefits for each of those lottery units.
Why house one lucky family in the most expensive part of town, and give four families nothing, when you could get rid of the program, not waive any taxes, and use the tax money from the luxury building in the fancy part of town to house all five families in a working class part of town?
Like so much of contemporary upper-middle class driven leftism it’s about the appearances—-hence the outrage over poor doors—-rather than actually helping people.
Privileged people want curated poor neighbors (bonus points if they are “diverse”) as an amenity.
I’ve lived in 80/20 buildings. None of the things you list make them a “joke” except the number of units.
Yes, the 20% apartments aren’t as nice, don’t get to use the gym for free, and in a couple of cases had a separate entrance.
So what?!? They were still massively subsidized and had giant lotteries for people that would have loved to get them.
No, outrage mongers notwithstanding, the real issue is that the programs are incredibly inefficient. The builders get millions of dollars of tax benefits for each of those lottery units.
Why house one lucky family in the most expensive part of town, and give four families nothing, when you could get rid of the program, not waive any taxes, and use the tax money from the luxury building in the fancy part of town to house all five families in a working class part of town?
Like so much of contemporary upper-middle class driven leftism it’s about the appearances—-hence the outrage over poor doors—-rather than actually helping people.
Privileged people want curated poor neighbors (bonus points if they are “diverse”) as an amenity.
Working-class areas and luxury areas aren’t a problem if there’s effective transportation. As it is most of California is packed to the gills with freeways and little in the way of rail.
(Sadly rail is often opposed by the luxury areas - the Santee extension of the Trolley was campaigned against as “importing crime”.)
(Sadly rail is often opposed by the luxury areas - the Santee extension of the Trolley was campaigned against as “importing crime”.)
The government already builds "too much" public housing in undesirable areas. For instance the San Francisco Housing Authority has had all waitlists closed for 10+ years. Many other relatively desirable areas are the same. But places like San Joaquin county have units available right now in Manteca. There are many people who have lived their whole lives in places like SF, Oakland, LA, and are illegally displaced, and would rather wait years for permanent housing under the current system.
Is it really helping them to force them to move far away?
Is it really helping them to force them to move far away?
My experience is in NYC. If you have no working class neighborhoods in your city, you have a different problem. One that is also unlikely to be solved by the standard “affordable housing” playbook.
Public housing as typically formulated in the US (and pardon some very hazy recollections and understanding) has been more an assistance/entitlement system offering only usefruct rights (that is: a roof over one's head), and no equity valuation.
The Shane Phillips / Lewis Centre proposal specifically addresses equity rights in addition, which is at the very least rare, if not novel.
(There are some co-housing / co-op structures which have some similarities, these are largely smaller scale.)
The Shane Phillips / Lewis Centre proposal specifically addresses equity rights in addition, which is at the very least rare, if not novel.
(There are some co-housing / co-op structures which have some similarities, these are largely smaller scale.)
The housing market is FUBAR because the people who already have a house absolutely 100% need prices to go up indefinitely to fund their lifestyle.
The government can't do anything either besides tell banks to lend starters more $ because the system cannot be allowed to collapse.
Doesn’t this depend on whether those homeowners have borrowed against their (rising) equity? I wonder what fraction of homeowners actually do so. Personally I wouldn’t dream of it, so rising prices don’t really affect my lifestyle at all.
A lot of home owners use their equity to invest (typically, in another property).
I think a lot of people see their family house as their pension plan. A house is an asset now.
With interest rates having nowhere to go but up, look for the government to introduce the fifty year mortgage in order to keep the party going.
why would the gov't be in control of the mortgage period? That's between the borrower and the bank.
In the vast majority of US mortgages the bank is the government. It’s deceptive because borrowers deal with private originators and servicers, but they are just contractors for the government.
In the US, most of the mortgage market has the government as the guarantor, via Fannie Mae, Ginnie Mae, and Freddie Mac.
If you have a conforming loan, then whoever is collecting interest is basically insured by the US taxpayers.
https://en.wikipedia.org/wiki/Conforming_loan
If you have a conforming loan, then whoever is collecting interest is basically insured by the US taxpayers.
https://en.wikipedia.org/wiki/Conforming_loan
You say “fund their lifestyle” like people’s houses appreciating is paying for their summer home or m5 when in reality it’s funding their ability to move with work and not get their equity eaten by inflation.
People need their houses to not deprecate and to roughly increase by value of the work put into the house during their time lived there.
People need their houses to not deprecate and to roughly increase by value of the work put into the house during their time lived there.
i bet there's a lot of people refinancing their homes right now and rolling their car loans and other stupid stuff into the new mortgage by using the equity. i watched a lot of people do that in 2006-2008.
hell even i'm considering taking out a loan against my increase in equity from the last two years to buy a plane because interest rates are so low.
hell even i'm considering taking out a loan against my increase in equity from the last two years to buy a plane because interest rates are so low.
> Also, the root cause isn't X, it's Y
Unfortunately unaffordable housing is a problem with many causes, not one simple root cause that explains everything to the detriment of all other factors.
Unfortunately unaffordable housing is a problem with many causes, not one simple root cause that explains everything to the detriment of all other factors.
ffggvv(2)
I'm a distributist, so I would prefer to see this type of system operated as a private cooperative, 100% owned by participants, rather than a government-run program. Why? Because then the people who get to make the decisions are the co-op participants themselves -- the people with the most skin in the game -- and the government can instead focus on areas where the participants actually need help, e.g. at the regulatory level, to make sure these arrangements are not unjustly disadvantaged.
* If you are not familiar with distributism, see this primer: https://shaungallagher.pressbin.com/blog/distributism-for-ki...
* If you are not familiar with distributism, see this primer: https://shaungallagher.pressbin.com/blog/distributism-for-ki...
> I would prefer to see this type of system operated as a private cooperative, 100% owned by participants, rather than a government-run program.
My thought too. There is cooperative housing that is run this way, though not on a large scale (that I know of).
My thought too. There is cooperative housing that is run this way, though not on a large scale (that I know of).
How does that differ meaningfully from home owners associations and the like?
One difference: Each coop member owns shares in the entire organization's assets, not in their specific unit (or they own the same fraction of their unit that they own of their neighbor's). For example, imagine the cooperative owns 10 buildings totally 50 units, worth $12 million total. Each of the 50 shareholders owns shares worth $12m/50 = $240,000.
For simplicity, I'm omitting the issue of the members building equity over time.
For simplicity, I'm omitting the issue of the members building equity over time.
The one time I lived in a neighborhood with a HOA, i found it provided a private pool and and a way for neighbors to be more exclusive, not inclusive. For instance, one of the HOA rules was that you cannot have any vehicle with commercial signage or lettering (like a plumber's van) parked outside over night. If my parents were to stay the night, the rules said that their pickup with lettering advertising their small business was not welcome in my driveway.
As I was writing this, the term "sundown law" came to mind.
As I was writing this, the term "sundown law" came to mind.
I totally get how that sucks but, if I lived in such a neighborhood, for that particular problem, could I solve it by buying a car cover? Not that I should have to, just curious.
The solution, as described by a wealthy neighbor when discussing something different (placement of plants?), was to just ignore the HOA. The HOA has a shoestring budget and a $10k legal bill would bankrupt it. So, if you are wealthy enough to hire expensive lawyers, rules don't apply to you.
That neighbor was a doctor that ran clinical trials. The discussion with him on HOAs and other topics left me disillusioned in so many ways.
The entire point of my earlier message was to point out that HOAs of the form I've seen are not a means to encourage diversity or inclusion. Rather, they are about maximizing home values by ensuring conformity to the target market.
That neighbor was a doctor that ran clinical trials. The discussion with him on HOAs and other topics left me disillusioned in so many ways.
The entire point of my earlier message was to point out that HOAs of the form I've seen are not a means to encourage diversity or inclusion. Rather, they are about maximizing home values by ensuring conformity to the target market.
Isn’t the fundamental problem that, in the starting condition, the potential participants can’t afford to buy property?
If they could afford to buy property to get started, it seems like it’s a different group of people than the article contemplates. Or perhaps I dramatically misunderstand your proposal.
If they could afford to buy property to get started, it seems like it’s a different group of people than the article contemplates. Or perhaps I dramatically misunderstand your proposal.
[deleted]
Sounds like an HOA
Normally, I wouldn’t hold up SF as any kind of functional example of city managed, BUT they do have one program that I think strikes an interesting balance between public interest in affordable housing and building wealth for underprivileged - BMR (below market rate ownership program): https://sfmohcd.org/bmr-ownership
In exchange for deed-restricting certain units to BMR, developers receive over concessions and density bonuses. BMR units are restricted to sale only to individuals or families that make under certain amount (indexes to inflation and area incomes). They get financing from preferred lenders under good terms. Equity is built up from principle payments and some appreciation. The catch is that when they sell, they need to sell to another BMR-approved person, which caps appreciation.
It’s not a goldmine, but better than renting (usually).
In exchange for deed-restricting certain units to BMR, developers receive over concessions and density bonuses. BMR units are restricted to sale only to individuals or families that make under certain amount (indexes to inflation and area incomes). They get financing from preferred lenders under good terms. Equity is built up from principle payments and some appreciation. The catch is that when they sell, they need to sell to another BMR-approved person, which caps appreciation.
It’s not a goldmine, but better than renting (usually).
This is "the rest of the story" on a recent HN submission which was not as it turns out the "rent vs. buy" polemic much of the discussion seemed to expect (not without some basis given the headline and structure of the article), but actually a fairly radical, and intersting, housing policy proposal. https://news.ycombinator.com/item?id=26824383
The article's author has in fact written a book on the subject, a chapter of which is exerpted here. (I've chosen the chapter title rather than article title for the submission.) The previous article had somehow managed to completely omit mention. The book itself is The Affordable City, by Shane Phillips, from Island Press:
https://islandpress.org/books/affordable-city
The article's author has in fact written a book on the subject, a chapter of which is exerpted here. (I've chosen the chapter title rather than article title for the submission.) The previous article had somehow managed to completely omit mention. The book itself is The Affordable City, by Shane Phillips, from Island Press:
https://islandpress.org/books/affordable-city
You're right that https://news.ycombinator.com/item?id=26824383 was completely derailed by its title, which often happens with sensational titles, especially about universal topics like housing, food, health, transportation.
But I don't think https://www.planetizen.com/features/110948-affordable-city-o... (the URL you submitted here) is a very good alternative—it seems kind of boring (mostly platitudes and cheerleading), and doesn't seem to cover the interesting bit, which is the specific proposal that you reference. So I've changed the URL back to the Atlantic article for now, with a variation of the subtitle which references that specific idea.
If there's a third article which is even better, we can change it again.
But I don't think https://www.planetizen.com/features/110948-affordable-city-o... (the URL you submitted here) is a very good alternative—it seems kind of boring (mostly platitudes and cheerleading), and doesn't seem to cover the interesting bit, which is the specific proposal that you reference. So I've changed the URL back to the Atlantic article for now, with a variation of the subtitle which references that specific idea.
If there's a third article which is even better, we can change it again.
Yeah, it's kind of a hard dig.
The Atlantic piece at least eventually gets around to describing the proposal. It manages to completely avoid any mention of the author's book (which I'd submitted as an addition), which is ... several shades of perplexing. The chapter extract also isn't the best though at least it points to the larger work. The two items in tandem ... kind of help get the message through?
(I'm doing some further digging on the initiative, proposal, Lewis Center, and Phillips in parallel with the discussion here. In a world of pretty tired and unimaginative suggestions regarding housing, this at least has some novel and possibly even likely elements, though it probably needs to be combined with other initiatives, most especially those discouraging idle land and real estate asset inflation. Phillips could use some coaching on persuasive writing and outreach as well....)
This is good for now.
The Atlantic piece at least eventually gets around to describing the proposal. It manages to completely avoid any mention of the author's book (which I'd submitted as an addition), which is ... several shades of perplexing. The chapter extract also isn't the best though at least it points to the larger work. The two items in tandem ... kind of help get the message through?
(I'm doing some further digging on the initiative, proposal, Lewis Center, and Phillips in parallel with the discussion here. In a world of pretty tired and unimaginative suggestions regarding housing, this at least has some novel and possibly even likely elements, though it probably needs to be combined with other initiatives, most especially those discouraging idle land and real estate asset inflation. Phillips could use some coaching on persuasive writing and outreach as well....)
This is good for now.
I don't know why they're not talking about cooperative ownership too! Limited-equity cooperative ownership seems to me seems the real third option. (Full-equity cooperatives like say NYC's market-rate alternative to condos is not what i'm talking about, and is just a form of ownership rather than another option).
https://shelterforce.org/2017/04/25/will-limited-equity-co-o...
To make it accessible to all necessary income levels, it may need government subsidy, and has sometimes had it in the past (just as obviously government-owned housing would be assumed to get subsidy). But tenant-controlled cooperatives seem preferable in all ways to straight-out government ownership (which yeah, isn't that just public housing), and limited-equity tenant-controlled cooperative ownership has a pretty successful track record in the US and other places.
https://nationalcooperativelawcenter.com/co-ops-are-better-a...
https://shelterforce.org/2017/04/25/will-limited-equity-co-o...
To make it accessible to all necessary income levels, it may need government subsidy, and has sometimes had it in the past (just as obviously government-owned housing would be assumed to get subsidy). But tenant-controlled cooperatives seem preferable in all ways to straight-out government ownership (which yeah, isn't that just public housing), and limited-equity tenant-controlled cooperative ownership has a pretty successful track record in the US and other places.
https://nationalcooperativelawcenter.com/co-ops-are-better-a...
This is what I thought the linked article would be about!
How is this any different from owning shares in a housing cooperative? Aside from the risk being - possibly - divided across multiple properties, I don't see how this would solve the main issues driving appreciating housing prices any better than attacking their root causes (build more housing supply, limit housing speculation, and prevent overleveraging).
That’s what I was thinking. However, there are some co-Ops in NYC that allow you to buy shares at a really cheap price VS what the market would pay. But when you sell, the co-op sells the shares so although you profit, you won’t be as much as if it were sold at market value. But you paid below market so it works out.
However, these aren’t just open to anyone. You need to know people to get in. It’s a self policing community that takes care of each other over generations. Even if you’re “in”, you’ll likely be on a waiting list until availability opens up.
However, these aren’t just open to anyone. You need to know people to get in. It’s a self policing community that takes care of each other over generations. Even if you’re “in”, you’ll likely be on a waiting list until availability opens up.
A lot of older condominiums in the states were originally housing cooperatives because the legal structure at the time didn't have an easy way to handle communal living (e.g., apartments).
There are even more of them in Europe, although you're generally expected to pay a significantly higher amount up front and actively participate in common area maintenance and (in some cases) participate in social activities and the like.
There are even more of them in Europe, although you're generally expected to pay a significantly higher amount up front and actively participate in common area maintenance and (in some cases) participate in social activities and the like.
Renting is underrated but owning is nice too if you want to root. However I think a lot of renters or people that complain they can’t afford a house also forget about the costs of property tax and maintenance. Those are 2 costs that never end and don’t remain fixed (in most places) over time.
For instance, anywhere reasonably commutable to NYC and close to a train line is going to probably have 10’s of thousands a year in property taxes...
For instance, anywhere reasonably commutable to NYC and close to a train line is going to probably have 10’s of thousands a year in property taxes...
I now pay more per year in property taxes outside of town than I did for rent on my first apartment (~15 years ago) walking distance from downtown. Granted it's considerably less than what rent probably is on that apartment now; rent has roughly doubled in that time.
And anyone who owns a house (especially an older one) knows that property taxes are relatively minor compared to maintenance costs (which are erratic and often unaccounted even by small landlords). They really add up.
Depends where you live really. Live in an in-demand suburb of NYC and there’s a good chance you’re paying 20-40k a year in property taxes. Certain parts of north New Jersey and southern Connecticut contain really pricy real estate compared to national averages, for example. Maintenance will be far below that most years. But if you can afford a million dollar+ piece of real estate then a few k in maintenance per year isn’t an issue.
In certain areas the land is worth more than the structure on it. The east coast has a good bunch of that.
In certain areas the land is worth more than the structure on it. The east coast has a good bunch of that.
How does this contrast with more old-school approaches to the housing crisis, like say, Georgism & Land Value Tax?
There was a big review on Progress & Poverty over at Astral Codex Ten recently on the subject: https://astralcodexten.substack.com/p/your-book-review-progr...
This proposal seems to address the same problem, but the mechanism is pretty different, and I'm wondering if it improves upon what the Georgists have already proposed, or if it is less efficient by being different.
There was a big review on Progress & Poverty over at Astral Codex Ten recently on the subject: https://astralcodexten.substack.com/p/your-book-review-progr...
This proposal seems to address the same problem, but the mechanism is pretty different, and I'm wondering if it improves upon what the Georgists have already proposed, or if it is less efficient by being different.
I think you're on the nose here.
The public ownership rental option goes nowhere without a capability to acquire (and retain) properties for the programme, and the ability to move unproductive or underproductive real estate into same.
California's property tax situation (e.g., 1977's Proposition 13) makes this an all but unsolvable problem for that state. Short a countervailing proposition, a (state) constitutional amendment, or a state or federal supreme court reversal, that law is going nowhere, and is pretty much a Land Value Tax's antiparticle / kryptonite.
One potentially promising alternative is the growth of land banks, mostly in the Eastern and Midwestern US, notably Illinoios, Ohio, and New York, possibly elsewhere. Though not based off a land value tax, tax-delinquent properties are acquired by the land bank which then attempts to return them to productive use. Pairing the land bank and public ownership rental models strikes me as a potential viable route to expanding both concepts.
The public ownership rental option goes nowhere without a capability to acquire (and retain) properties for the programme, and the ability to move unproductive or underproductive real estate into same.
California's property tax situation (e.g., 1977's Proposition 13) makes this an all but unsolvable problem for that state. Short a countervailing proposition, a (state) constitutional amendment, or a state or federal supreme court reversal, that law is going nowhere, and is pretty much a Land Value Tax's antiparticle / kryptonite.
One potentially promising alternative is the growth of land banks, mostly in the Eastern and Midwestern US, notably Illinoios, Ohio, and New York, possibly elsewhere. Though not based off a land value tax, tax-delinquent properties are acquired by the land bank which then attempts to return them to productive use. Pairing the land bank and public ownership rental models strikes me as a potential viable route to expanding both concepts.
Banking seems like the best way to phrase this to prevent people from screaming about socialism.
Your insight has been growing on me each time I re-read it.
In Switzerland many people rent and many landlords are pension funds. In a way this is public-ownership rental in the sense that it is a common rent relationship (as a tenant you pay a monthly rent and the landlord is responsible for the upkeep of the property) but that the landlord is a quasi-public organization (quasi-public because the pension fund is a private company working in a heavily regulated market helping people saving for their retirement).
This is just an example how this might be solved in other countries. I think however the private pension fund system in Switzerland has many problems: firstly the employer selects the organization for you and not you yourself (Chilean system), and secondly for some people working in the trade it is a secure get-rich scheme, and that's not all.
(A note: both arms of the systems, the private pension fund system and the public pension, are mandatory.)
This is just an example how this might be solved in other countries. I think however the private pension fund system in Switzerland has many problems: firstly the employer selects the organization for you and not you yourself (Chilean system), and secondly for some people working in the trade it is a secure get-rich scheme, and that's not all.
(A note: both arms of the systems, the private pension fund system and the public pension, are mandatory.)
Isn't this, what a housing cooperative are about? They are very common in Germany and seen as valuable cultural heritage.
https://en.wikipedia.org/wiki/Housing_cooperative
https://en.wikipedia.org/wiki/Housing_cooperative
Co-ops address only one aspect of a three-element triad: supply, stability (co-ops here), and subsidy.
In his book, and the chapter exerpt I've linked in an earlier comment, Phillips explains why all three elements are key.
Co-ops (or similar co-housing or community-housing arrangements) cannot of and by themselves address the greater supply problem, or provide subsidies for at-risk, disabled (temporarily or permanently) individuals, children, or retirees. They're useful, but insufficient.
In his book, and the chapter exerpt I've linked in an earlier comment, Phillips explains why all three elements are key.
Co-ops (or similar co-housing or community-housing arrangements) cannot of and by themselves address the greater supply problem, or provide subsidies for at-risk, disabled (temporarily or permanently) individuals, children, or retirees. They're useful, but insufficient.
Land tax is a must but I have an even funnier idea. Tax corporations per employee and adjust the amount to the housing shortage. Make the tax truly terrifying if there is a big shortage.
If you really must run your shop in that ultra expensive location you just pay for it. If you cant afford it you simply do not have what it takes, the area is not for you and you should leave. Make room for a business that belongs OR turn the building into housing.
You would still have home owners who want to continue to ride the housing ponzi but they would be directly opposed by corporations.
The revenue should be reserved for subsidies on constructive construction. Free money for anyone who [partially] solves the problem.
If you really must run your shop in that ultra expensive location you just pay for it. If you cant afford it you simply do not have what it takes, the area is not for you and you should leave. Make room for a business that belongs OR turn the building into housing.
You would still have home owners who want to continue to ride the housing ponzi but they would be directly opposed by corporations.
The revenue should be reserved for subsidies on constructive construction. Free money for anyone who [partially] solves the problem.
Your proposed tax could be based on a "housing pressure index", basically squarefeet of livable space per person or people per squarefoot. This index would measure if there are lots of families living in cramped conditions or people living with room mates.
If housing pressure is too high, tax corporations more.
If housing pressure is too high, tax corporations more.
> If housing pressure is too high, tax corporations more.
It's always "tax more to solve problem X, as long as the target of that tax isn't me".
It's always "tax more to solve problem X, as long as the target of that tax isn't me".
The target of the tax should be the party creating the problem so that they themselves can solve it.
Before you plant down your office in some densely populated area you make a cost benefit analysis. The housing problem is part of the cost. We've traditionally expected others to deal with it (read pay for it) but it doesn't work. Or put differently, we've failed employers in creating housing for their employees. So now that we've proven ourselves incompetent we might as well put the puzzle in front of those who created it.
It's easy to ignore your staff being unable to afford a roof over their head if you are relatively unaffected by it. The moment you get billed for it you can assign the task to someone and create a budget. If there are also subsidies we can expect corporations to attempt to solve the puzzle.
If they are unaffected by the problem it is really hard to get some solution going internally. Who knows, perhaps they are more competent than the rest of us? If not the number of jobs (demand) can be scaled down to fit supply.
Before you plant down your office in some densely populated area you make a cost benefit analysis. The housing problem is part of the cost. We've traditionally expected others to deal with it (read pay for it) but it doesn't work. Or put differently, we've failed employers in creating housing for their employees. So now that we've proven ourselves incompetent we might as well put the puzzle in front of those who created it.
It's easy to ignore your staff being unable to afford a roof over their head if you are relatively unaffected by it. The moment you get billed for it you can assign the task to someone and create a budget. If there are also subsidies we can expect corporations to attempt to solve the puzzle.
If they are unaffected by the problem it is really hard to get some solution going internally. Who knows, perhaps they are more competent than the rest of us? If not the number of jobs (demand) can be scaled down to fit supply.
If you go by squarefoot large homes would distort the picture. I was thinking some formula counting people who want/need to live there.
Taxing new hires? Sounds like a great way to chase jobs away.
More houses can be build, transportation can be improved, people can work from home.
People want to move to expensive areas to work because companies chose to create their jobs there.
If a business is not profitable enough to be there they should move some place else. If you want to allow mediocre businesses people will have to sleep under the bridge, on the sofa with friends or find some other way to live packed up like sardines. The mediocre salary demands it.
We can apparently fit a lot more jobs in a city than it can deal with. The jobs are not the scarce resource. They will continue to exist some place better. Some place where the salary buys a good life.
People want to move to expensive areas to work because companies chose to create their jobs there.
If a business is not profitable enough to be there they should move some place else. If you want to allow mediocre businesses people will have to sleep under the bridge, on the sofa with friends or find some other way to live packed up like sardines. The mediocre salary demands it.
We can apparently fit a lot more jobs in a city than it can deal with. The jobs are not the scarce resource. They will continue to exist some place better. Some place where the salary buys a good life.
Simpler solutions are better. Private funding for new housing stock obviates the need for complex government-run bureaucracies that create their own set of problems with rent-seeking behavior like cronyism.
So if there were a good way to overcome the political power of homeowners in maintaining regulatory restrictions that prevent the expansion of housing supply, so that the private sector could respond to market forces and expand housing supply, that would be preferrable.
According to one analysis, it would only take de-regulating three US cities' housing markets: New York, San Francisco and San Jose, to boost US economic growth on the order of over one third over a span of 45 years:
https://www.aeaweb.org/articles?id=10.1257/mac.20170388
So here's one potential solution: federalize control over these three cities' zoning rules, in order to remove all of their zoning restrictions on building density, while investing resources into speeding up their permit approval process.
This is similar to Japan's housing laws, where the national government decides zoning rules in all cities, including in major economic clusters / key job markets like Tokyo.
So if there were a good way to overcome the political power of homeowners in maintaining regulatory restrictions that prevent the expansion of housing supply, so that the private sector could respond to market forces and expand housing supply, that would be preferrable.
According to one analysis, it would only take de-regulating three US cities' housing markets: New York, San Francisco and San Jose, to boost US economic growth on the order of over one third over a span of 45 years:
https://www.aeaweb.org/articles?id=10.1257/mac.20170388
So here's one potential solution: federalize control over these three cities' zoning rules, in order to remove all of their zoning restrictions on building density, while investing resources into speeding up their permit approval process.
This is similar to Japan's housing laws, where the national government decides zoning rules in all cities, including in major economic clusters / key job markets like Tokyo.
If this is such a good idea, why don’t they raise private funds from various charities and rich people to fund an experiment? Why am I as a taxpayer constantly asked to fund ever more schemes? This one has the all markings of a non-profit, and if you involve the government and associated bureaucracy it will become an entrenched quagmire like the huge housing projects that have been torn down in many cities. I don’t see why we need a trillion-dollar slush fund to make this happen.
I agree. Also how does this system change the cost of housing over all. I don't see how it changes anything. The simple reason rents are high in some areas is supply and demand. Will this increase supply? Or reduce demand in those areas. Doubt it.
Expanding on this, there are already similar schemes out there, and they've done nothing to stop property price inflation.
Abstracting away ownership from the property to a collective legal entity ignores the main reason why people 'own' property in the first place - property needs to be actively maintained, and when it's not, those affected need to be able to identify and movitiate a responsible party.
Even when you own stock in a cooperative, you're responsible for the part you live in. Once you tie in financing, insurance, and utilities, you're left with something that looks an awfully lot like property ownership, except with a slightly different fee structure.
Abstracting away ownership from the property to a collective legal entity ignores the main reason why people 'own' property in the first place - property needs to be actively maintained, and when it's not, those affected need to be able to identify and movitiate a responsible party.
Even when you own stock in a cooperative, you're responsible for the part you live in. Once you tie in financing, insurance, and utilities, you're left with something that looks an awfully lot like property ownership, except with a slightly different fee structure.
> ignores the main reason why people 'own' property in the first place
no, the main reason people own property is to extract profit from it (or extract utility - essentially the same thing). Maintenance is merely a hinderance that they put up with in order to maximize said utility/profit extraction.
If it were possible to create a property with no need for maintenance, the owners would opt for that!
no, the main reason people own property is to extract profit from it (or extract utility - essentially the same thing). Maintenance is merely a hinderance that they put up with in order to maximize said utility/profit extraction.
If it were possible to create a property with no need for maintenance, the owners would opt for that!
Ownership is a legal fiction. In the context of common law countries, the state originally held final "ownership" over all land. People largely weren't allowed to own property in the modern sense of the term until after the Statute of Westminster (1290), which was passed after it became too difficult for courts to resolve who, exactly, was responsible for what (and for how long, and what was owed in return) under the older feudal system.
I'm sure a lawyer or someone with a better understanding of the history behind all of this can chime in, but the concept of ownership is very much tied to the state's need to know who is responsible for each piece of land, whether for taxation, ensuring upkeep, or for resolving court disputes.
I'm sure a lawyer or someone with a better understanding of the history behind all of this can chime in, but the concept of ownership is very much tied to the state's need to know who is responsible for each piece of land, whether for taxation, ensuring upkeep, or for resolving court disputes.
"Spending so much on a rental feels wasteful—irresponsible, even—when you could pay a similar price on a mortgage, at a constant level for the next 30 years, while also building substantial wealth"
Unless your home insurance rises every year and your monthly ownership costs double in 4 years.
Many of us lost houses in the oughts to exactly that.
Unless your home insurance rises every year and your monthly ownership costs double in 4 years.
Many of us lost houses in the oughts to exactly that.
“Renting is insane why would anyone do it”
“Also SaaS and the cloud is the future of everything”
HN summed up but they don’t seem to see the connections.
“Also SaaS and the cloud is the future of everything”
HN summed up but they don’t seem to see the connections.
Much of Eastern Europe tried this between the 1940s through the late 1980s. The result was blocks upon blocks of cramped, drab apartments with long waiting periods to get one. If you were married, you could get one sooner, which resulted in unhappy marriages. It sounds good in theory, in practice it didn’t work.
I don't think that what this article is describing is similar at all to Eastern Europe-style public housing. The US also had a big experiment in public housing in the 20th century, that also had a lot of bad results.
The US had a history of spending capex on flashy high rise housing. Then failing to spend the opex necessary to maintain what they built.
Large buildings are harder to maintain and require more specialized labor.
Means testing and segregation also impacted public housing in the US. (Better not make too much money or you'll have to leave!)
There are several instances of successful public housing efforts in the US and Europe, typically more low rise or mid rise distributed properties.
Large buildings are harder to maintain and require more specialized labor.
Means testing and segregation also impacted public housing in the US. (Better not make too much money or you'll have to leave!)
There are several instances of successful public housing efforts in the US and Europe, typically more low rise or mid rise distributed properties.
Part of the problem is the false dichotomy between single family suburban style dwellings and high-rises. The middle ground, medium density row houses and similar, is almost impossible to build anymore in many locations. The costs and regulations are such that either you build a single family dwelling or fight for a high-rise.
It’s a dichotomy because politically active and influential people do not want density near their detached single family suburban style homes. Everyone wants to live around people at or above their level.
If you’re a developer, then fighting against this group will take a lot of resources and it’s risky, so you can’t bet on medium density to make it worth it, you have to aim for more.
If you’re a developer, then fighting against this group will take a lot of resources and it’s risky, so you can’t bet on medium density to make it worth it, you have to aim for more.
"Think of a woman who buys a home in one part of town, takes a new job in another area a few years later, and is then stuck with a 90-minute commute, or of a man who turns down the better job because he doesn’t want to sell his home or be saddled with a long commute. Now multiply that by millions of households across the country. Homeownership locks people in place, in large part because of the high transaction costs of buying and selling property."
This assumes that you exist first and foremost to work jobs, and anything that impedes this is bad and needs to be optimized away. This is very American, very contemporary - don't accept it as universal.
Move a little to the side in time and in space and people are "from somewhere", live there, and optimize their life to improve them living there - possibly by taking jobs in the vicinity.
This assumes that you exist first and foremost to work jobs, and anything that impedes this is bad and needs to be optimized away. This is very American, very contemporary - don't accept it as universal.
Move a little to the side in time and in space and people are "from somewhere", live there, and optimize their life to improve them living there - possibly by taking jobs in the vicinity.
You assume that there are good jobs (read: reliable sources of income and health coverage) in all places, and that nobody is putting down roots or attempting to invest in their local communities. Your assumptions are wrong.
Maybe the real problem is that the only way to have income is to have a job. But that's another story.
Maybe the real problem is that the only way to have income is to have a job. But that's another story.
Something that bothers me is this:
In California, 75% of renters support building more housing, 51% of owners support building more housing, and yet housing gets built at a glacial pace. I'd like to know why this is. Some wild-ass guesses:
1. A majority of Californians support housing being built, just not too close to where they are
2. The 75% or Renters and 51% of homeowners skew younger and are thus less likely to vote or complain at community board meetings
3. The permitting process in municipalities near me is so byzantine that it's expensive in both time and money to build new construction; the added time could be particularly problematic because that's greater risk that housing prices will plummet before construction is complete.
In California, 75% of renters support building more housing, 51% of owners support building more housing, and yet housing gets built at a glacial pace. I'd like to know why this is. Some wild-ass guesses:
1. A majority of Californians support housing being built, just not too close to where they are
2. The 75% or Renters and 51% of homeowners skew younger and are thus less likely to vote or complain at community board meetings
3. The permitting process in municipalities near me is so byzantine that it's expensive in both time and money to build new construction; the added time could be particularly problematic because that's greater risk that housing prices will plummet before construction is complete.
If you're paying someone else to live in a house, then you are on the losing side of the power dynamic.
While this is broadly true, it's not universally true.
I was far better off renting when I moved to this town. I had a down-payment, but my rent was less than the just the interest on my mortgage for a condo would have been and I likely would have had a commute instead of a sub 10 minute walk.
Instead I invested my money and was able to buy a house after the housing crash. For the house I purchased, I ultimately paid about half the original asking price.
If you are forced to pay someone else to live in a house, then you are on the losing side of the power dynamic.
The above anecdote was in the crazy real-estate market of coastal California. If you generalize for the rest of the country though, housing prices track inflation on average, so if you are leveraged 5:1 you can expect to gross 5x inflation on your house before you account for taxes, interest, insurance, and maintenance.
You may end up ahead of the market at that rate, but it's not exactly a sure thing. It's not unreasonable to say that the flexibility of being able to move will improve your lifestyle by more than the difference.
OTOH, we can say that 100% of the people who own houses have the means to own a house, but obviously much less than 100% of the people who rent have the means to buy a house, so the point is taken.
I was far better off renting when I moved to this town. I had a down-payment, but my rent was less than the just the interest on my mortgage for a condo would have been and I likely would have had a commute instead of a sub 10 minute walk.
Instead I invested my money and was able to buy a house after the housing crash. For the house I purchased, I ultimately paid about half the original asking price.
If you are forced to pay someone else to live in a house, then you are on the losing side of the power dynamic.
The above anecdote was in the crazy real-estate market of coastal California. If you generalize for the rest of the country though, housing prices track inflation on average, so if you are leveraged 5:1 you can expect to gross 5x inflation on your house before you account for taxes, interest, insurance, and maintenance.
You may end up ahead of the market at that rate, but it's not exactly a sure thing. It's not unreasonable to say that the flexibility of being able to move will improve your lifestyle by more than the difference.
OTOH, we can say that 100% of the people who own houses have the means to own a house, but obviously much less than 100% of the people who rent have the means to buy a house, so the point is taken.
There's a second third option (or first third, as it already exists) -- community land trusts. The basic idea is that you own the house but the land under the house is owned by a non-profit.
https://slate.com/business/2016/01/bernie-sanders-made-burli...
https://slate.com/business/2016/01/bernie-sanders-made-burli...
This is the reason why First Nations reserves are universally terrible places to live.
No thanks, I'd rather own my home.
We should be working towards the practical goal of making owning a home practical again. I don't want to live in some box owned by a collective.
We should be working towards the practical goal of making owning a home practical again. I don't want to live in some box owned by a collective.
The proposal seems untenable unless it creates a marketable asset. The more detailed description (http://www.betterinstitutions.com/blog/2021/2/2/rental-pensi...) calls it "Social Security" for housing.
I’ve always been curious - what if we imposed a law disallowing owning more than 1 home. Wouldn’t this reduce demand and, in doing so, lower prices from less competition?
I’m sure there’s other aspects I’m missing which make this a bad idea but there’s something that doesn’t feel right about people owning 2-3 homes while others can’t get on the property ladder.
I’m sure there’s other aspects I’m missing which make this a bad idea but there’s something that doesn’t feel right about people owning 2-3 homes while others can’t get on the property ladder.
build more cities. and move jobs there.
housing is only expensive where land is expensive - city centres. The Government is able to take long enough view to do this. Any commercial actor will be against this due to rent seeking / market cornering.
What is doable in near / short term is to move government agencies out of big cities into smaller ones and start drawing people by creation of stable employment. Right now everyone is more and more forced into the same 1-5 cities per country if you want to have a well paying job. And you have to have one to pay for college / medical insurance.
I think my point is clear also not very groundbreaking. It's only that people who could do this are 50+/old and have a conflict of interest - they want to prop up their house value.
housing is only expensive where land is expensive - city centres. The Government is able to take long enough view to do this. Any commercial actor will be against this due to rent seeking / market cornering.
What is doable in near / short term is to move government agencies out of big cities into smaller ones and start drawing people by creation of stable employment. Right now everyone is more and more forced into the same 1-5 cities per country if you want to have a well paying job. And you have to have one to pay for college / medical insurance.
I think my point is clear also not very groundbreaking. It's only that people who could do this are 50+/old and have a conflict of interest - they want to prop up their house value.
Doesn't fly with zero trust in public policy administration. Which is the mindset I am currently forced to take. Too corruptible, esp. at the local level.
This sounds like a nightmare. Yes, I always wanted to co own my place of residence with a faceless lumbering beaurocracy.
That could be good for the valley as long as the US government is paying for it and not CA
In Europe there is Mietshäuser Syndikat https://www.syndikat.org/en/
Their model seems to work well. I think this is the way. Capitalism seems to be oddly unprepared, if you just drop the profit drive in the middle of things. Seems like you can make the system sell itself out.
Their model seems to work well. I think this is the way. Capitalism seems to be oddly unprepared, if you just drop the profit drive in the middle of things. Seems like you can make the system sell itself out.
Haha
> A third option is necessary: a way to rent without making someone else rich.
I care how much I pay. I don't give a shit who gets it.
I care how much I pay. I don't give a shit who gets it.
If buy-to-let is profitable, people will do it as a business...
If people do it as a business, it'll drive the price of housing up even more, and since businesses have more capital than workers, the latter will be priced out (if lucky, they'll be able to afford a 90% LTV which will take decades to repay, but most workers cannot afford it on their own)
If you care how much you pay, you care about who is extracting money out of you
If people do it as a business, it'll drive the price of housing up even more, and since businesses have more capital than workers, the latter will be priced out (if lucky, they'll be able to afford a 90% LTV which will take decades to repay, but most workers cannot afford it on their own)
If you care how much you pay, you care about who is extracting money out of you
That does not follow - they are still fulfilling housing demand by renting it and more capital means more ability to build houses.
The whole premise appears telological - landlords are intrinsically bad ergo everything they do will make the housing situation worse.
The whole premise appears telological - landlords are intrinsically bad ergo everything they do will make the housing situation worse.
You're mixing up home builders with landlords.
The latter aren't fulfilling housing demand: they are capturing it by outcompeting people who cannot afford property prices (prices driven up by buy-to-let demand).
You say that landlords are intrinsically bad: lots of people agree with you on that... I stop short of it, since there's a minority of people for which renting is a preferable solution (at least temporarily) and nationalising the whole housing market is infeasible.
The latter aren't fulfilling housing demand: they are capturing it by outcompeting people who cannot afford property prices (prices driven up by buy-to-let demand).
You say that landlords are intrinsically bad: lots of people agree with you on that... I stop short of it, since there's a minority of people for which renting is a preferable solution (at least temporarily) and nationalising the whole housing market is infeasible.
Given the eventual concentrating of ownership, who gets it does matter in that it creates a land-ownership monopoly. Policies which discourage concentration of ownership, through land value taxation or public ownership, counter this tendency.
The amount you pay is set by the people who get it.
It's set mostly by supply and demand across the market. The owner and the renter can get together and negotiate a small deviation based on the property's idiosyncracies, but it's the market that's primarily driving it.
The term for an opportunistic escalation in pricing (of a critical commodity) due to a rapid-onset shortage is price gouging.
Like many US markets, local rental prices have ~doubled in the last two years. As in every case of price gouging, sufficient supply would have prevented the opportunism that is presently causing broad harm.
Huzzah for supply and demand, I guess.
Like many US markets, local rental prices have ~doubled in the last two years. As in every case of price gouging, sufficient supply would have prevented the opportunism that is presently causing broad harm.
Huzzah for supply and demand, I guess.
The alternative to "price gouging" is imposing some form of price controls. Since housing cannot be created out of thin air, that means some people will get lucky and everyone else will have to do without. I'm not sure that's any less a harm.
The alternative to price gouging is not price controls (that just redirects the pain into shortages instead). It's increasing supply. Housing can actually be built quite quickly - it's the bureaucratic stuff (permits, zoning, etc), which makes it take forever.
Right, pricing is following supply and demand. There's a lack of supply so the prices inevitably go up.
Increase the supply through deregulation or incentives and we won't have this problem.
Increase the supply through deregulation or incentives and we won't have this problem.
Not really.
Housing resembles nothing like a free market.
Supply and demand is driven a lot by political forces (regulation, political favoritism) that effectively limit supply.
Large land-owning political entities or blocs have outsized influence on these factors.
Just because supply is constrained by regulations doesn't mean that pricing isn't driven by supply and demand. Those two things aren't mutually exclusive.
Profit motive drives your rent up.
And competition drives it down.
In the case of land, no, competition drives attempts to curtail supply, in which case the value goes up further.
Which is why something that works the way a Georgian land value tax is designed is ultimately necessary.
Which is why something that works the way a Georgian land value tax is designed is ultimately necessary.
People generally rent homes rather than just land. When zoning doesn't interfere, landowners maximize their profit by creating as many homes on each parcel of land as they believe they'll be able to find tenants for. A land tax might help, but it is silly to say that people wouldn't ever use their land productively without one.
NIMBY says otherwise.
Hence "When zoning doesn't interfere"
NIMBY is more than just zoning.
Or put another way: zoning isn't the only tool used by NIMBYs.
The problem is institutional, and is based in the same economics (inelastic supply of land) that makes a land-value tax so effective. If by any means possible an entity or consortium of them can restrict new development in an area, then as a whole their ability to capture consumer surplus value through economic rents increases.
This can be holding units off market, limiting density, restrictions on various utility hookups (typically sewerage and water), redlining, title insurance, homeowners' insurance, and more. I've found direct documentation of such practices dating to 1937, and long preceding that.
When recently the mechanized industries, particularly in metal, entered the housing field with the production of “prefabricated houses”, they were met by the resistance of property holders, especially of the banks, who hold mortgages on about 58 percent of all 1933 value of all urban real estate,149 and who fear that an influx of cheap modern dwellings would subtract substantially from the market value of existing structures.150 These banks and loan companies have been unwilling to finance prefabricated houses except in rare exceptions and then on a limited basis. Lumber companies and manufacturers of other materials which are being displaced in the production of prefabricated houses, have sought to prevent their construction through building-code restrictions and by organizing boycotts by dealers and building crafts. Moral and ethical rationalizations have been used against prefabricated houses. The director of the New England division of the American Institute of Architects in May 1934 attacked prefabricated houses as tending “to substitute a life of vagrancy for responsible citizenship in the community”.151 The author of an article entitled, “Houses Cannot be Built Like Automobiles”, who speaks on behalf of architects against prefabrication, argues plaintively, “Spiritual, mental, and physical well-being is enhanced always by the exercise and development of individualism, especially when related to the home and its environment. Housing that fails to respect these human values must be considered among the ‘chats’ to be discarded”.152
Planned public housing projects such as slum clearance which afford the most efficient methods of utilizing advanced technologies in the building industry, crash against the wall of vested private-property interest. They meet the combined opposition of the owners of obsolete buildings, that nonetheless are still profitable, of landowners who demand prohibitive prices, of holders of mortgages who fear a depreciation of housing values through the increase in available homes. Achievements in building technology lie sterile in the face of the opposition of these interests. It has been calculated that at the rate of replacement between 1921 and 1933 of homes and apartments, the American house will be in use 142 years.153 Such slow replacement, based on profits derived from old houses, impedes the building of new structures, however pressing the housing needs for the mass of the population of the United States may be.
Bernhard J. Stern, "Resistances to the Adoption of Technological Innovations", 1937 https://archive.org/details/technologicaltre1937unitrich/pag...
Markdown: https://rentry.co/szi3g
Or put another way: zoning isn't the only tool used by NIMBYs.
The problem is institutional, and is based in the same economics (inelastic supply of land) that makes a land-value tax so effective. If by any means possible an entity or consortium of them can restrict new development in an area, then as a whole their ability to capture consumer surplus value through economic rents increases.
This can be holding units off market, limiting density, restrictions on various utility hookups (typically sewerage and water), redlining, title insurance, homeowners' insurance, and more. I've found direct documentation of such practices dating to 1937, and long preceding that.
When recently the mechanized industries, particularly in metal, entered the housing field with the production of “prefabricated houses”, they were met by the resistance of property holders, especially of the banks, who hold mortgages on about 58 percent of all 1933 value of all urban real estate,149 and who fear that an influx of cheap modern dwellings would subtract substantially from the market value of existing structures.150 These banks and loan companies have been unwilling to finance prefabricated houses except in rare exceptions and then on a limited basis. Lumber companies and manufacturers of other materials which are being displaced in the production of prefabricated houses, have sought to prevent their construction through building-code restrictions and by organizing boycotts by dealers and building crafts. Moral and ethical rationalizations have been used against prefabricated houses. The director of the New England division of the American Institute of Architects in May 1934 attacked prefabricated houses as tending “to substitute a life of vagrancy for responsible citizenship in the community”.151 The author of an article entitled, “Houses Cannot be Built Like Automobiles”, who speaks on behalf of architects against prefabrication, argues plaintively, “Spiritual, mental, and physical well-being is enhanced always by the exercise and development of individualism, especially when related to the home and its environment. Housing that fails to respect these human values must be considered among the ‘chats’ to be discarded”.152
Planned public housing projects such as slum clearance which afford the most efficient methods of utilizing advanced technologies in the building industry, crash against the wall of vested private-property interest. They meet the combined opposition of the owners of obsolete buildings, that nonetheless are still profitable, of landowners who demand prohibitive prices, of holders of mortgages who fear a depreciation of housing values through the increase in available homes. Achievements in building technology lie sterile in the face of the opposition of these interests. It has been calculated that at the rate of replacement between 1921 and 1933 of homes and apartments, the American house will be in use 142 years.153 Such slow replacement, based on profits derived from old houses, impedes the building of new structures, however pressing the housing needs for the mass of the population of the United States may be.
Bernhard J. Stern, "Resistances to the Adoption of Technological Innovations", 1937 https://archive.org/details/technologicaltre1937unitrich/pag...
Markdown: https://rentry.co/szi3g
You do if it exacerbates wealth disparity and inflation.
This is an introduction of a discussion about removal of ownership of means of production, basically.
This is a step towards socialism.
This is a step towards socialism.
Ugh.
Yes, and that's great.
There hasn't been any historical precedence for which removing the means of production from being owned has turned out well. Because, either it has never been truly attempted - but just a thinly disguised usurpation of property by force, or that it failed and devolve back into ownership model anyway.
Anyone who has seen how public owned goods turn out would realize how much of a bad idea it is: for a budget similar to the DoD, you may get wait lines like in a DMV, with as much administrative fiddling as the NASA, with a quality of service as good as the DHS. If you are lucky, you may get as many choices as their are public transportation option in the midwest.
Thanks but no thanks.
Thanks but no thanks.
Care to provide some evidence to back up your claim or are you just on the red scare train.
Well, I’m straining to think of service offered by a Bay Area govt that is well run and efficient.
Evidence is the cleanliness of public transportation, the derelict public bikes and other 2 wheel battery assisted devices, the derelict laptops in school that provide them to student...
Maybe it's just a big anti communist plot, or maybe it's just human nature to not take care about things you do not own.
Maybe it's just a big anti communist plot, or maybe it's just human nature to not take care about things you do not own.
I live in a new york. Our subway is clean and regular, the bike share docks in my neighborhood are stocked and well-maintained. The busses, though sometimes crowded, run on time.
Public transport works well when your city prioritizes it. I spent my youth living in places that don't and I literally cannot imagine going back.
Public transport works well when your city prioritizes it. I spent my youth living in places that don't and I literally cannot imagine going back.
> Public transport works well when your city prioritizes it.
And when there is critical mass. Public transit works in dense urban centers, because it's less worse than driving and parking. It doesn't work in smaller towns. There, it just becomes something that everybody pays for but a tiny minority of people ever use.
And when there is critical mass. Public transit works in dense urban centers, because it's less worse than driving and parking. It doesn't work in smaller towns. There, it just becomes something that everybody pays for but a tiny minority of people ever use.
> Our subway is clean and regular
I've noticed it got cleaner after COVID happened. Before COVID... It was world's most disgusting subway I ever been to: filthy, sketchy and leaks rust on your head.
I've noticed it got cleaner after COVID happened. Before COVID... It was world's most disgusting subway I ever been to: filthy, sketchy and leaks rust on your head.
what? what universe is this. the subway is probably one of the best by US standards, but that's not saying much...they've been kicking the can down the road for too long. remember 2 years ago when it was going thru a crisis due to the signal repairs? or sandy repairs on the L... don't even get me started on buses. the only thing i love about nyc subways is that they are 24/7 and the city is dense enough that it's convenient.
> I live in a new york. Our subway is clean
Litteraly where I stopped believing you.
It's dirty. Only DC has a somehow-clean subway, which stands out as a nice exception to the rule.
Litteraly where I stopped believing you.
It's dirty. Only DC has a somehow-clean subway, which stands out as a nice exception to the rule.
Do you want me to send you a picture of my license with my home address? The subway, especially post-covid, is clean.
Does nobody consider the carrying capacity of an area, that only so many people can live in an area under given zoning regulations, and that further increase of population density necessarily causes fundamental change to living conditions? Romantic as the notion of avoiding displacement is, either density increases or price increases - both unpleasant. Exponential population increase in a geographically limited mostly-2-dimensional area can’t retain the same quaint culture.
Change happens. Stability can’t be decreed.
Change happens. Stability can’t be decreed.
The problem is that when you are from a poor background, you will have difficult time saving money for a new house if you chose a path of working hard, getting educated and then getting a good job. All because of progressive tax, that is being sold to public as tax on the rich, but reality is that it prevents people from escaping poverty and makes sure people don't grow beyond a certain point.
The rich on the other hand don't pay the same taxes as anyone else - they have money to get around any system that is put in place.
I think the first step should be removing the higher tax bracket, so that people can save money quicker.
For example:
If there is 0% tax up to 10k
20% up to 40k
40% from 40k
And you got a good job and want to live like your colleagues, likely your costs of living will take up all salary up to 40k. Then above that for any 1000 you make, you have to give 400 to the state. Let's say you make 60k. So 20k will be taxed at 40%. It will take you over 8 years to save 100k. If 40% bracket was removed, then it would only take you around 6 years to save. So the difference is 2 years of sacrifice. If you had that extra money, you could spend 2 years on improving your skills, starting a business etc.
For some reason I see both sides want to keep progressive tax - the left wants it, so that people keep being poor and therefore their clients. The right wants it, so that the rich amongst them can feel special - as the club is kept being small.
I think how tax affects people from poor backgrounds should be looked into.
If there is 0% tax up to 10k
20% up to 40k
40% from 40k
And you got a good job and want to live like your colleagues, likely your costs of living will take up all salary up to 40k. Then above that for any 1000 you make, you have to give 400 to the state. Let's say you make 60k. So 20k will be taxed at 40%. It will take you over 8 years to save 100k. If 40% bracket was removed, then it would only take you around 6 years to save. So the difference is 2 years of sacrifice. If you had that extra money, you could spend 2 years on improving your skills, starting a business etc.
For some reason I see both sides want to keep progressive tax - the left wants it, so that people keep being poor and therefore their clients. The right wants it, so that the rich amongst them can feel special - as the club is kept being small.
I think how tax affects people from poor backgrounds should be looked into.
I've certainly noticed this. I'm not from a rich family, I was raised on welfare and I've managed to work my way into finally being able to buy my own three bedroom home in my 30s. Have a lot of friends who don't make anything near what I do, but middle class/rich parents that were able to give them a kick along the road with a house deposit telling me "oh, I'm surprised you lived in a tiny two bedroom apartment on your wage".
Knowing that I have to build my own retirement really makes me resent that so much of what I earn is going to the state to pay for what, a few shitty public art sculptures that no one likes, a crumbling public transport system that somehow has all the money in the world to pay for all sorts of diversity programs but not enough to actually deliver the services everyone thinks they should, and health department bureaucrats that are more interested in bogging healthcare providers down in paperwork than actually letting them tend to the sick.
It's all very tiring.
Knowing that I have to build my own retirement really makes me resent that so much of what I earn is going to the state to pay for what, a few shitty public art sculptures that no one likes, a crumbling public transport system that somehow has all the money in the world to pay for all sorts of diversity programs but not enough to actually deliver the services everyone thinks they should, and health department bureaucrats that are more interested in bogging healthcare providers down in paperwork than actually letting them tend to the sick.
It's all very tiring.
You're not arguing that progressive taxation is bad - you're arguing that taxes are not progressive enough. The point behind progressive taxation is that the rich can pay more (both practically they have more money and they miss the money less). If you are concerned, advocate to move the brackets up. 0% to 40k, 10% 40-80k, up to 50% 200k+ (these numbers were done to make my straight line math example easier, I don't know what the real numbers are.)
Meanwhile, without progressive taxation, in the US, your income taxes would average $12,075 your FICA (which is flat) would average another $8,581. With an average income of ~61,000 that means everyone would write a check for 33% of their income to the government. This means those making more than around $250,000 a year would pay less, and other people would pay a lot more.
I think you need to think about what the alternatives to progressive taxation look like.
(If you want to talk about treating capital gains as normal income, that's a completely different topic that would advantage poor people.)
Meanwhile, without progressive taxation, in the US, your income taxes would average $12,075 your FICA (which is flat) would average another $8,581. With an average income of ~61,000 that means everyone would write a check for 33% of their income to the government. This means those making more than around $250,000 a year would pay less, and other people would pay a lot more.
I think you need to think about what the alternatives to progressive taxation look like.
(If you want to talk about treating capital gains as normal income, that's a completely different topic that would advantage poor people.)
But the rich bypass income tax altogether. It does not apply to them.
The truly wealthy (e.g. Bezos) bypass income tax. The rich (e.g. surgeon making 400k/year) tend not to.
But the last line I wrote was addressing this issue. We should prevent the wealthy from bypassing income tax. That is a different issue from what the taxes will look like.
But the last line I wrote was addressing this issue. We should prevent the wealthy from bypassing income tax. That is a different issue from what the taxes will look like.
Where is $100k needed for a down payment on a house and income over $40k is taxed at 40%? I'm not saying it doesn't exist, I just haven't seen it.
US Federal tax brackets are at https://www.irs.com/articles/2020-federal-tax-rates-brackets.... Notice that the standard deduction of $12400 for a single filer and $24800 for married filers means that the first $12400 or $24800 is not taxed.
In contrast to that progressive tax, there are things like payroll tax (social security, medicare), sales tax, and all those taxes on phone and cable/internet bills that (proportionally) hit the poor much harder.
US Federal tax brackets are at https://www.irs.com/articles/2020-federal-tax-rates-brackets.... Notice that the standard deduction of $12400 for a single filer and $24800 for married filers means that the first $12400 or $24800 is not taxed.
In contrast to that progressive tax, there are things like payroll tax (social security, medicare), sales tax, and all those taxes on phone and cable/internet bills that (proportionally) hit the poor much harder.
1) Public funds provide capital to build a new dwelling; individuals move in at rates similar to market rent.
2) Rather than rents paying a landlord, rents act like principal payments on a personal mortgage - e.g. I own $10,000 worth of shares of the property after paying $1,000/mo for ten months.
3) Eventually, I own enough of a share of the property that I no longer have to make payments, similar to having paid off a mortgage. I'd be responsible for upkeep (e.g. roof repairs), property taxes, that sort of thing.
What I'm not understanding, though, is how this passes down. If I'm a partial owner and move, doesn't the next buyer have the same issue raising capital that the model tries to address? Does it not also mean that I could become a landlord in my own right, and begin renting to another occupant, who stands to build no wealth themselves?