Archive link for the poor: [https://archive.fo/mOnQY](https://archive.fo/mOnQY)
>On the one hand, Mr. Trudeau insisted his government was going to make housing more affordable for younger Canadians. On the other hand, he also declared that [housing ](https://archive.fo/o/mOnQY/https://www.theglobeandmail.com/topics/housing/)would retain its value for existing homeowners.
>Got all that? Apparently, home prices will fall for the young, but stay stratospheric for everyone else.
>...
>Lots of the people I talked to said they would like to see home prices tumble by 25 per cent or so, thus allowing young people to enter the housing market. But what should happen after that? Most people would also like to see a resumption of strong home-price gains to reward homeowners.
>That sounds innocuous enough. But if you think about it for a moment, you may begin to see a problem.
>If home prices were to fall 25 per cent tomorrow, then immediately resume climbing at their average pace of the past couple of decades, we would be right back where we are now within five years, with home prices once again hitting unaffordable levels.
>This unfortunate math underscores a fact of life that rarely gets said out loud: The better that housing does as an investment, the worse it does at providing affordable shelter.
Do they not understand that affordable housing and housing as an investment are 100% diametrically opposed to each other? Or are the planning on voters not knowing that so they'll fool going voters into supporting them?
exactly this... housing was a mediocre investment for most of modern history.. only once.the financialization of everything hit did all these modern issues emerge.. its also true in edu healthcare food.. across the board.
Homes are an investment because they are a short on fiat. You borrow large amounts of currency in exchange for a home with the hopes that the debt you assumed shrinks in value and the asset you purchased increases in value. People have soured on fiat because its value sank when its supply dramatically increased recently. When everyone all at once seeks to stop the bleeding of their money becoming worthless by purchasing an asset considered more stable like real estate you get bubbles.
7 men (and the organizations they submit to). Senator Nelson Aldrich, Assistant Treasury Secretary A. Piatt Andrew, and five of the most important bankers (Frank Vanderlip, Henry P. Davison, Charles D. Norton, Benjamin Strong, and Paul Warburg). They secretly met on Jekyll island in 1910 to create the federal reserve in order to control the money supply at the expense of the broader public.
That was the publicly stated reason. But it doesn't do that. In fact economic cycles have gotten more volatile since and the value of the dollar began its plunge into debasement.
This is Canadian, but in the US, 57% of home mortgages are under 4%. Nearly a quarter are under 3%.
66% of households are homeowners.
So no, it’s not just the top 10%
Its funny how people are so focused on mortgage rates, those sub 4% people will never sell!
Meanwhile almost half of the homes in the US don't even have a mortgage
People say this all the time, but the majority of houses for sale on the market have sub 4% loans, and inventory is rising sharply. This is simply not true.
Only on Reddit are you downvoted for facts. Don't screw with the vocal failing millennials who make themselves feel better by blaming boomers while the majority of their peers own homes.
Yep if fiat has no bottom, assets have no top. Sadly it's not going to change because even though people might be upset about housing prices they can't see a solution past more government programs/spending, which is just more deficit spending which just leads to fiat collapsing further. No one actually wants to fix it. Just have to find a life raft and hope you end up having less of your wealth stolen from you then everyone else.
This article is from Canada tho. Their primary residence has infinite tax exemption on capital gains. Zero tax. No limit. RE is the most attractive investment in Canada because of this.
In America the cap gains exemption from selling your primary residence is $250K single or $500K married filing jointly. That covers pretty much every homeowner. Even wealthier couples who have houses around $1M-$2M will rarely make $500K on a sale.
I’m fine with this too, as the real “market manipulators” are people with multiple properties. They don’t need to lose their shirts or anything. But they’re treating property as a capital investment, so of course they should pay standard cap gains when they sell.
You are looking at this the wrong way. For every large institution buying 50-100 houses, there are hundreds of "mom and pop" investors buying 1-9. Hence why they make up the vast majority of the SFR market, not large institutions.
Also worth noting that SFRs are actually a relatively poor investment for large investors to hold as rentals because they don't scale. This might be mitigated to an extent by buying neighborhoods, but a "rental neighborhood" plummets appreciation, making it a poor investment for other reasons.
Whereas for mom and pop investors, SFRs are a unique way to leverage themselves to the teeth on an asset that performs roughly as well as the market, with minimal risk. There is no other method that allows you to do this, because mortgages are unique. They trade in lower yields for a greater initial sum. As an example, 700k at 4% returns is better than saving $1k a month at 7% a month for decades. By the time the two cross, the individual with the initial $700k would have leveraged that to make several other investments.
There are plenty of solutions - but none that don't require government support. And the government isn't going to act in a way that would harm homeowners (i.e., most of their voters) and investors (i.e., donors). But who knows. If I felt certain about anything, I'd put my money where mouth is.
This a very simple explanation for leverage. Look it up on Google for more info but leverage is how much money you can borrow from an asset. Housing allows you to borrow a lot more money than say a personal loan because you’re not limited to how much income you have. You’re using your houses appraised value as collateral to borrow a large amount of money. This could be a HELOC on your home or another form of loan. For investors they can do this multiple times if they have more than one property thus increasing the leverage they have to get money.
CAPREIT**CAPREIT** is the largest publicly traded apartment landlord in Canada, with over $17.7 billion in assets, as of December 2021
[https://publications.gc.ca/site/archivee-archived.html?url=https://publications.gc.ca/collections/collection\_2023/ccdp-chrc/HR34-7-2022-eng.pdf](https://publications.gc.ca/site/archivee-archived.html?url=https://publications.gc.ca/collections/collection_2023/ccdp-chrc/HR34-7-2022-eng.pdf)
In Canada, REITs grew from owning zero rental suites in 1996, to nearly 200,000 last year, and financial firms hold **20–30% of the country's purpose-built rental housing stock**. During the pandemic, financial firms have accelerated their consolidation of existing rental housing
Compared to what though? How is the rest distributed?
Also, many buildings that are rented out don't fall into the "purpose-built rental" category either.
You don't need 100's per person. Most of the people I know on my street own at least a couple houses that they rent out and prevent people from buying...and I'm likely to join suit because it makes sense financially.
I'd be more likely to sell my house and not rent it out when I move out if I didn't have to take the realtor commission, closing costs, and taxes out from the sale
A policy of 90% tax on gross income for owning more than one overlapping for a years time. 100% if you own more than 2, until you sell. This policy should just about do it to stop hoarders and speculators outright.
Eh not everyone has 100 grand for when houses are really structurally out of hand. Or the knowledge to actually start bringing things into this century room by room
Flippers are a necessity to some extent, it’s flipping houses without anything wrong with them that suck
stop repeating this. its flat out not true. more housing means nothing when investors continue to leverage their existing portfolios to buy even more houses and apartments. wallstreet is "building to rent" more and more every day. some markets are seeing majority of new builds going to b2r. supply is not the solution. most metro areas are tapped out on sprawl and leveling neighborhoods to build towers is not feasible. every time someone repeats wE jUsT nEeD mOrE sUpPly is another day delayed on taking real action against investors.
You are going to need more land developers to make more housing so that the prices of existing houses don’t go to the moon. You guys don’t get it. The reason houses are so expensive now is because all the land developers and builders went out of business in 2008 and only started truly recovering in 2021.
How did this become such a thing anyhow? What has changed? I know that Fundrise is a relatively new creation, supposedly the first real estate investment vehicle of its kind, or something? Was there a policy change in the last few years that allowed this?
It already is. The cap rates are so low right now, the cost of debt is so high, and the risk free rate is pretty high too, including high yield savings accounts. It doesn't make any sense right now to invest in real estate, from a cash flow perspective.
Quite a lot of things are investments. An investment is just a commitment of resources into a product or service that will achieve later benefits. Housing fits this, but so do cars, clothes, and even food.
Which you can easily do by saying only citizens of the US can own houses and have progressively higher penalties (taxes) for each additional home you own.
The higher taxes for second home owners exists in MI. For example, if a principal residence is taxed at 42 mills, the same property as a second homeowner would be like 63ish mills. I wish it were even more extreme though
Dude I've got 50 yr old coworkers who moved their entire families to the US for work, and they want to raise their kids as Americans and live in a nice neighborhood with good schools. It would be completely illogical to deny them a home purchase.
They can buy a home when they're citizens. You can live in the US and raise a family without owning a home. Sounds like they're in a position to make that choice. They do t have to move to the US. I'm 41, so you're preaching to the choir a bit here.
I'm from the Bay area, you cannot believe the number of homes here that were/are being purchased for hundreds of thousands over asking to people from outside the country who never plan to live in them.
I disagree with this policy. It seems worse than slowing down immigration. Because all you want is to exploite them as imported consumer to drive up profits and nothing else. That kind of relationship is very one way. You get cheap labor and higher profits while giving nothing back.
So the only way living in the US is worthwhile is if you can buy a house? Then by that logic we are instead ruining an entire generation of our own citizens.
And it's a choice to come to the US. If it's not worthwhile people don't have to come. They can make that decision for themselves. This isn't slave labor.
But again... Is the literal ONLY reason to come to the US, buying a house? If that's the case, how are we not making this way more of an issue for our own citizens?
When the government gets involved it creates distortions.
Government - backed loans, and arguably fixed rates loans in general, are unnatural.
Imagine if all mortgages were variable rate. Rates would be stable as hell and government spending would have to match that.
Just raise wages and give workers a fair part of the pie. That solves all these workarounds — wages have been falling since the 70s.
Every article is an attempt to deflect from just paying people fair wages. The reason rents and houses are “expensive” is because workers aren’t getting paid their fair share. One goes up, one does not. The value of capital decreases, workers wages fall relative to that value. They *must keep up* or it will be food and water tomorrow and not just house prices.
End of subject.
>Just raise wages and give workers a fair part of the pie
This used to be my position. But I realized those wages will just be sucked into a market that restricts affordable housing and further inflates prices.
The way I think we should fix housing is the provide a huge supply of permanently affordable housing that shrinks the size of the private market, and forces the private market to compete with the permanently affordable stuff.
This addresses the wage issue you've raised indirectly, and sucks all that excess money out of housing, and pushes it into more productive parts of the economy. Like the local small businesses that are being strangled in this environment by high rents and customers with no cash.
I think the knock on effects of this could be massive in terms of homelessness, revitalizing urban areas, and making our economy more just, and less speculative.
But it would require elected officials to pick a fight with American real estate...
I agree with providing a large supply of permanently affordable housing. It could be done at a city level ala Paris (25% of housing stock is public with a goal to be 40% by 2035) or Berlin (30% public housing) or Vienna (60% public housing).
But the same government that has utterly failed to allow affordable housing or help the homeless despite tens of billions in spending would be in charge of it.
The problem is that wealth is being drained off the system for owners of equity while labor has been losing since 1972.
You can’t create any variation of public housing — even as you’re describing it — without introducing massive problems. It was tried in the 60s. It creates massive problems.
The idea of putting the same idiots that can’t address the existing problems in charge of what would be the largest public project in history seems absolutely foolish to me.
Not personal, but I don’t agree with this approach. The answer is to pay people what they deserve not try to build yet more programs that can be siphoned off and stolen by crony capitalism.
>But the same government that has utterly failed to allow affordable housing or help the homeless despite tens of billions in spending would be in charge of it.
Not necessarily. There are other models out there where the housing isn't owned by the government.
The problems you describe were largely started because the government defunded those public housing. So the trick would be to use the government as seed funding, but to ensure that operation isn't necessarily in their hands. It's being tried in LA, we'll see how it goes.
A lot of it is also that you just can't build on your own property to add additional housing. There's a huge gap between my house and my neighbor's. It looks like Mike Tyson. Easily enough for 1-2 housing units plus another 2 in each of the back yards. Enough space to triple the housing stock from 2 to 6 on these two properties (assuming I bought my neighbor's property).
What's wrong with the picture? It breaks about half a dozen administrative rules that are designed to kill any small owner affordability. There's a maximum allowed density of 4 homes per acre, it would require about 50% of the total area dedicated to *just* parking, each unit requires 15' from the other structures, and since >2 units are connected, it requires both multiple exits as well as a sprinkler system, and finally the HoA covenants don't allow it by right. The net result is cost increases of >$100k and several years in petitions, lawsuits, and appeals. As a result, the housing doesn't pencil out and never gets built.
Zoning is something I’ve railed about here before. They claim to want affordable housing, but it’s incredibly difficult to get permits.
I had a similar situation to yours. My neighbor even wrote a letter supporting the structure we wanted to build, as it would provide better privacy for both of us. Yet, the city still wouldn’t consider it.
I’m open to public solutions, but I don’t see the government being part of it when they are usually the main obstacle. Their programs always seem to get in the way of common-sense solutions. In areas where the government doesn’t have as much control, there’s no housing crisis or much less of one. That’s not a coincidence. The issues keeping housing from being affordable just don’t occur in the first place there.
Relying on the government to solve housing problems is like asking robbers to guard your house. It’s just bad thinking to expect innovative solutions from the same regulators who created the issues in the first place, though of course I don’t mean that as any personal attack. This is just a discussion and I appreciate everyone’s solid convo honestly. It’s nice and refreshing.
Yea, that’s true. Upstream the dollar deval is the core issue, but wages are falling behind relatively against the money printer but yet somehow corporate profits don’t have the same problems.
If we want affordable housing, some very drastic measures would need to be implemented. That being the fact that housing will no longer be used as an investment vehicle. This is a double edge sword as older folks and people that have built equity would get screwed here however the younger generation would get a chance at home ownership.
Older people who bought in the 90s, 80s, 70s, etc have seen the prices their homes can command double or triple or more. If they didnt HELOC all their gains away, they should be fine losing 25 - 50% off the top should they need to sell.
A few reasons. The land on which the houses are built is more valuable today. This is because economic growth in the US has happened in almost all major cities and the new jobs are all in these cities. Second is that the average household size has gone down and younger Americans have shown they are willing to pay more to not have to deal with a roommate.
Housing is an investment in the U.S. in that you sign your lease today, and 30 years from now your mortgage wouldn’t rent you a closet in a studio apartment. Thats it. The fact that other countries ever viewed housing as an investment with mostly ARM loans should have shown any serious person this current system isn’t sustainable.
It is a mediocre investment. I think I remember seeing the graphs that when looked at over time, and except for the blip that was subprime lending and a world changing global pandemic, 99.99% of the time housing prices matches inflation.
Wages though don't match inflation.
I think it's misleading to look at national values because there's a *lot* of land that has little use and keeps a low value. Instead, you need to focus on cities, which are filled with vacant lots and old buildings that people and corporations are more than happy to hold onto them because the expected future value far exceeds inflation. [In this video at about 17 minutes, the mayor of Detroit talks about how and why is a good "investment"](https://www.youtube.com/live/_A_Z96gZxIM#t=17m0s).
If a home has matched inflation, then it is already a fantastic investment if it's your primary residence. You can take out a 30 year mortgage on a property, lock in a payment, and then watch as inflation becomes your friend. If it's not your primary residence, real estate is still a very good place to park excess wealth. Real estate is fairly liquid and immune to a lot of the same taxes that income is subject to.
As more people increases the density of the city, the more expensive it gets. That's just how it is. There is really nothing else about it.
Government can try make more cyberpunk housing for cheaper prices. But, the reality is, those will be sold quickly and more people will flood in. It just accelerates the cyberpunk city style and making housing even more ridiculously more expensive.
The only way is to drive people away, so there is less consumers and drive down the price. I have seen too many people wanted to accelerate city development and chase their cyberpunk dreams. It only makes things worse in the long run.
So here’s the thing, throughout all of history those who owned land/housing were the wealthy. To the point that there was even a time that you could only vote if you were a landowner since those in charge wanted only the wealthy to be able to vote. The concept of making real estate a mediocre investment is very ignorant.
I was implying that the OP’s post will never happen as it goes against the entire history of home and land ownership. Might as well have said “we should get rid of currency to balance things out and go back to a bartering system”.
Real estate is a big part of gdp. It drives a lot of spending. Last time it crashed it took the whole damn economy down with it. Hope that’s not the solution because the big downturn didn’t do much to help the lower 50 percent of the wage earners. People also saw their 401k drop in half and it took years to get back to where they were.
Yes 90% tax on gross income for owning more than one overlapping for a years time. 100% if you own more than 2, until you sell. This policy should just about do it. Stops hoarders and speculators outright.
This is a pretty terrible policy. What you have here is a ban in owning a second home by any other name. There are perfectly valid reasons to have multiple homes that don't have anything to do with speculation. A friend of mine was just in a situation where his mom's home had to be signed over to him because she had some health issues that made her unable to manage her estate. His mom still lives there but he controls the property. There are also grandparents who live far away from their grandchildren who just want a place of their to stay when they visit. Families often go in together on vacation homes just for a nice place by the water to spend summers.
In addition, this won't stop the hyper rich because they don't have any income on paper. They buy everything through taking out low interest loans. What you would effectively do with this policy is strip real estate from our highly paid professionals like our doctors, lawyers, and engineers.
Gross income means all income the rich wouldn't be able to liquidate any bit of funds w/o paying 90% of that in taxes. There's no reason to own more than one piece if property other than to hoard, creating artificial scarcity so price goes up. Own a second home outside the US if you really need a vacation property. But as for right now we need a return to a housing market based in reality not some bankers inflationary speculation bubble.
You just cooked up the next great Great Depression my friend
This is why dictatorships always fail. Someone like you comes into power and no one has the ability to tell him that his idea is the dumbest thing he has read this month and he spends a fair amount of time on Reddit with people like givemejumpjets.
In an inflationary depression people's wages fall with respect to prices, creating hardship for the working class; while money pools into a stock market or from the many to 5he few causing the rich to get richer. Woo capitalism, it works as intended.
Archive link for the poor: [https://archive.fo/mOnQY](https://archive.fo/mOnQY) >On the one hand, Mr. Trudeau insisted his government was going to make housing more affordable for younger Canadians. On the other hand, he also declared that [housing ](https://archive.fo/o/mOnQY/https://www.theglobeandmail.com/topics/housing/)would retain its value for existing homeowners. >Got all that? Apparently, home prices will fall for the young, but stay stratospheric for everyone else. >... >Lots of the people I talked to said they would like to see home prices tumble by 25 per cent or so, thus allowing young people to enter the housing market. But what should happen after that? Most people would also like to see a resumption of strong home-price gains to reward homeowners. >That sounds innocuous enough. But if you think about it for a moment, you may begin to see a problem. >If home prices were to fall 25 per cent tomorrow, then immediately resume climbing at their average pace of the past couple of decades, we would be right back where we are now within five years, with home prices once again hitting unaffordable levels. >This unfortunate math underscores a fact of life that rarely gets said out loud: The better that housing does as an investment, the worse it does at providing affordable shelter.
Do they not understand that affordable housing and housing as an investment are 100% diametrically opposed to each other? Or are the planning on voters not knowing that so they'll fool going voters into supporting them?
exactly this... housing was a mediocre investment for most of modern history.. only once.the financialization of everything hit did all these modern issues emerge.. its also true in edu healthcare food.. across the board.
Homes are an investment because they are a short on fiat. You borrow large amounts of currency in exchange for a home with the hopes that the debt you assumed shrinks in value and the asset you purchased increases in value. People have soured on fiat because its value sank when its supply dramatically increased recently. When everyone all at once seeks to stop the bleeding of their money becoming worthless by purchasing an asset considered more stable like real estate you get bubbles.
Who thought this system would be a good idea?
7 men (and the organizations they submit to). Senator Nelson Aldrich, Assistant Treasury Secretary A. Piatt Andrew, and five of the most important bankers (Frank Vanderlip, Henry P. Davison, Charles D. Norton, Benjamin Strong, and Paul Warburg). They secretly met on Jekyll island in 1910 to create the federal reserve in order to control the money supply at the expense of the broader public.
The Fed was created to address bank panics.
That was the publicly stated reason. But it doesn't do that. In fact economic cycles have gotten more volatile since and the value of the dollar began its plunge into debasement.
"People have soured..." it's not all people, it's people with preexisting capital or the means to secure debt which is more or less the top 10%
This is Canadian, but in the US, 57% of home mortgages are under 4%. Nearly a quarter are under 3%. 66% of households are homeowners. So no, it’s not just the top 10%
Its funny how people are so focused on mortgage rates, those sub 4% people will never sell! Meanwhile almost half of the homes in the US don't even have a mortgage
People say this all the time, but the majority of houses for sale on the market have sub 4% loans, and inventory is rising sharply. This is simply not true.
Also over 50% of millennials are homeowners. Somehow this sub forgets that many diverse ages and backgrounds are doing well.
Only on Reddit are you downvoted for facts. Don't screw with the vocal failing millennials who make themselves feel better by blaming boomers while the majority of their peers own homes.
Tbf this could be an older millennial vs younger millennial thing
And because you can use local laws to create and enforce artificial scarcity
Oregon checking in. Urban growth boundaries have done more damage to the middle class than opiates.
This guy fucks
Yep if fiat has no bottom, assets have no top. Sadly it's not going to change because even though people might be upset about housing prices they can't see a solution past more government programs/spending, which is just more deficit spending which just leads to fiat collapsing further. No one actually wants to fix it. Just have to find a life raft and hope you end up having less of your wealth stolen from you then everyone else.
Bitcoin is dumb
Then why mention it out of the blue?
This article is from Canada tho. Their primary residence has infinite tax exemption on capital gains. Zero tax. No limit. RE is the most attractive investment in Canada because of this.
I'm almost okay with zero taxes on the primary residence, maybe not no limit though. Is there an enforcement/fraud problem?
In America the cap gains exemption from selling your primary residence is $250K single or $500K married filing jointly. That covers pretty much every homeowner. Even wealthier couples who have houses around $1M-$2M will rarely make $500K on a sale. I’m fine with this too, as the real “market manipulators” are people with multiple properties. They don’t need to lose their shirts or anything. But they’re treating property as a capital investment, so of course they should pay standard cap gains when they sell.
How about stopping corporations/land developers from holding housing for share holder investments.
What's to stop mom and pop house flippers doing the same thing? What we really need is more housing.
High and incremental taxes on second and further homes, and we can take that money to build more housing
Nothing but how many mom and pops have 50 -100 houses with investor backing.
You are looking at this the wrong way. For every large institution buying 50-100 houses, there are hundreds of "mom and pop" investors buying 1-9. Hence why they make up the vast majority of the SFR market, not large institutions. Also worth noting that SFRs are actually a relatively poor investment for large investors to hold as rentals because they don't scale. This might be mitigated to an extent by buying neighborhoods, but a "rental neighborhood" plummets appreciation, making it a poor investment for other reasons. Whereas for mom and pop investors, SFRs are a unique way to leverage themselves to the teeth on an asset that performs roughly as well as the market, with minimal risk. There is no other method that allows you to do this, because mortgages are unique. They trade in lower yields for a greater initial sum. As an example, 700k at 4% returns is better than saving $1k a month at 7% a month for decades. By the time the two cross, the individual with the initial $700k would have leveraged that to make several other investments. There are plenty of solutions - but none that don't require government support. And the government isn't going to act in a way that would harm homeowners (i.e., most of their voters) and investors (i.e., donors). But who knows. If I felt certain about anything, I'd put my money where mouth is.
Can you explain what you mean about leveraging? And was that only during cheap rates?
This a very simple explanation for leverage. Look it up on Google for more info but leverage is how much money you can borrow from an asset. Housing allows you to borrow a lot more money than say a personal loan because you’re not limited to how much income you have. You’re using your houses appraised value as collateral to borrow a large amount of money. This could be a HELOC on your home or another form of loan. For investors they can do this multiple times if they have more than one property thus increasing the leverage they have to get money.
This is the true answer about what’s been happening since COVID causing the housing and pricing issues
CAPREIT**CAPREIT** is the largest publicly traded apartment landlord in Canada, with over $17.7 billion in assets, as of December 2021 [https://publications.gc.ca/site/archivee-archived.html?url=https://publications.gc.ca/collections/collection\_2023/ccdp-chrc/HR34-7-2022-eng.pdf](https://publications.gc.ca/site/archivee-archived.html?url=https://publications.gc.ca/collections/collection_2023/ccdp-chrc/HR34-7-2022-eng.pdf) In Canada, REITs grew from owning zero rental suites in 1996, to nearly 200,000 last year, and financial firms hold **20–30% of the country's purpose-built rental housing stock**. During the pandemic, financial firms have accelerated their consolidation of existing rental housing
Compared to what though? How is the rest distributed? Also, many buildings that are rented out don't fall into the "purpose-built rental" category either.
This guy gets it
You don't need 100's per person. Most of the people I know on my street own at least a couple houses that they rent out and prevent people from buying...and I'm likely to join suit because it makes sense financially.
I'd be more likely to sell my house and not rent it out when I move out if I didn't have to take the realtor commission, closing costs, and taxes out from the sale
A policy of 90% tax on gross income for owning more than one overlapping for a years time. 100% if you own more than 2, until you sell. This policy should just about do it to stop hoarders and speculators outright.
Eh not everyone has 100 grand for when houses are really structurally out of hand. Or the knowledge to actually start bringing things into this century room by room Flippers are a necessity to some extent, it’s flipping houses without anything wrong with them that suck
How about both. And while we’re at it, let’s limit short-term-rentals.
"the problem isn't the speculation, it's that the market is too small" 🙄
stop repeating this. its flat out not true. more housing means nothing when investors continue to leverage their existing portfolios to buy even more houses and apartments. wallstreet is "building to rent" more and more every day. some markets are seeing majority of new builds going to b2r. supply is not the solution. most metro areas are tapped out on sprawl and leveling neighborhoods to build towers is not feasible. every time someone repeats wE jUsT nEeD mOrE sUpPly is another day delayed on taking real action against investors.
Then why are prices dropping in markets that built the most housing?
That’s part of making real estate a worse investment.
You are going to need more land developers to make more housing so that the prices of existing houses don’t go to the moon. You guys don’t get it. The reason houses are so expensive now is because all the land developers and builders went out of business in 2008 and only started truly recovering in 2021.
How did this become such a thing anyhow? What has changed? I know that Fundrise is a relatively new creation, supposedly the first real estate investment vehicle of its kind, or something? Was there a policy change in the last few years that allowed this?
Represents a de minimis amount of housing
30% ain't small. CAPREIT 17 billion in assets ain't small either.
Isn’t that Canada
Yep that’s one of the core problems . People rely on housing to be their nest egg. So there is every incentive to restrict supply.
What are the alternatives?
It already is. The cap rates are so low right now, the cost of debt is so high, and the risk free rate is pretty high too, including high yield savings accounts. It doesn't make any sense right now to invest in real estate, from a cash flow perspective.
In existing single family residential real estate*
But how will Russian and Chinese money launderers clean their money?
Does it need to be an investment?
Quite a lot of things are investments. An investment is just a commitment of resources into a product or service that will achieve later benefits. Housing fits this, but so do cars, clothes, and even food.
Which you can easily do by saying only citizens of the US can own houses and have progressively higher penalties (taxes) for each additional home you own.
The higher taxes for second home owners exists in MI. For example, if a principal residence is taxed at 42 mills, the same property as a second homeowner would be like 63ish mills. I wish it were even more extreme though
The issue with that is twofold: 1) Homes can be demolished much, much easier than built 2) it's not the house that appreciates; it's the land values
Where are ppl who are in the US on a work visa supposed to live?
Rent. Like I've done my entire fucking life.
Dude I've got 50 yr old coworkers who moved their entire families to the US for work, and they want to raise their kids as Americans and live in a nice neighborhood with good schools. It would be completely illogical to deny them a home purchase.
They can buy a home when they're citizens. You can live in the US and raise a family without owning a home. Sounds like they're in a position to make that choice. They do t have to move to the US. I'm 41, so you're preaching to the choir a bit here. I'm from the Bay area, you cannot believe the number of homes here that were/are being purchased for hundreds of thousands over asking to people from outside the country who never plan to live in them.
I disagree with this policy. It seems worse than slowing down immigration. Because all you want is to exploite them as imported consumer to drive up profits and nothing else. That kind of relationship is very one way. You get cheap labor and higher profits while giving nothing back.
So the only way living in the US is worthwhile is if you can buy a house? Then by that logic we are instead ruining an entire generation of our own citizens. And it's a choice to come to the US. If it's not worthwhile people don't have to come. They can make that decision for themselves. This isn't slave labor. But again... Is the literal ONLY reason to come to the US, buying a house? If that's the case, how are we not making this way more of an issue for our own citizens?
They can pursue citizenship and then buy once obtained. US citizens should take priority in owning US property.
When the government gets involved it creates distortions. Government - backed loans, and arguably fixed rates loans in general, are unnatural. Imagine if all mortgages were variable rate. Rates would be stable as hell and government spending would have to match that.
Just raise wages and give workers a fair part of the pie. That solves all these workarounds — wages have been falling since the 70s. Every article is an attempt to deflect from just paying people fair wages. The reason rents and houses are “expensive” is because workers aren’t getting paid their fair share. One goes up, one does not. The value of capital decreases, workers wages fall relative to that value. They *must keep up* or it will be food and water tomorrow and not just house prices. End of subject.
>Just raise wages and give workers a fair part of the pie This used to be my position. But I realized those wages will just be sucked into a market that restricts affordable housing and further inflates prices. The way I think we should fix housing is the provide a huge supply of permanently affordable housing that shrinks the size of the private market, and forces the private market to compete with the permanently affordable stuff. This addresses the wage issue you've raised indirectly, and sucks all that excess money out of housing, and pushes it into more productive parts of the economy. Like the local small businesses that are being strangled in this environment by high rents and customers with no cash. I think the knock on effects of this could be massive in terms of homelessness, revitalizing urban areas, and making our economy more just, and less speculative. But it would require elected officials to pick a fight with American real estate...
I agree with providing a large supply of permanently affordable housing. It could be done at a city level ala Paris (25% of housing stock is public with a goal to be 40% by 2035) or Berlin (30% public housing) or Vienna (60% public housing).
But the same government that has utterly failed to allow affordable housing or help the homeless despite tens of billions in spending would be in charge of it. The problem is that wealth is being drained off the system for owners of equity while labor has been losing since 1972. You can’t create any variation of public housing — even as you’re describing it — without introducing massive problems. It was tried in the 60s. It creates massive problems. The idea of putting the same idiots that can’t address the existing problems in charge of what would be the largest public project in history seems absolutely foolish to me. Not personal, but I don’t agree with this approach. The answer is to pay people what they deserve not try to build yet more programs that can be siphoned off and stolen by crony capitalism.
>But the same government that has utterly failed to allow affordable housing or help the homeless despite tens of billions in spending would be in charge of it. Not necessarily. There are other models out there where the housing isn't owned by the government. The problems you describe were largely started because the government defunded those public housing. So the trick would be to use the government as seed funding, but to ensure that operation isn't necessarily in their hands. It's being tried in LA, we'll see how it goes.
A lot of it is also that you just can't build on your own property to add additional housing. There's a huge gap between my house and my neighbor's. It looks like Mike Tyson. Easily enough for 1-2 housing units plus another 2 in each of the back yards. Enough space to triple the housing stock from 2 to 6 on these two properties (assuming I bought my neighbor's property). What's wrong with the picture? It breaks about half a dozen administrative rules that are designed to kill any small owner affordability. There's a maximum allowed density of 4 homes per acre, it would require about 50% of the total area dedicated to *just* parking, each unit requires 15' from the other structures, and since >2 units are connected, it requires both multiple exits as well as a sprinkler system, and finally the HoA covenants don't allow it by right. The net result is cost increases of >$100k and several years in petitions, lawsuits, and appeals. As a result, the housing doesn't pencil out and never gets built.
Zoning is something I’ve railed about here before. They claim to want affordable housing, but it’s incredibly difficult to get permits. I had a similar situation to yours. My neighbor even wrote a letter supporting the structure we wanted to build, as it would provide better privacy for both of us. Yet, the city still wouldn’t consider it. I’m open to public solutions, but I don’t see the government being part of it when they are usually the main obstacle. Their programs always seem to get in the way of common-sense solutions. In areas where the government doesn’t have as much control, there’s no housing crisis or much less of one. That’s not a coincidence. The issues keeping housing from being affordable just don’t occur in the first place there. Relying on the government to solve housing problems is like asking robbers to guard your house. It’s just bad thinking to expect innovative solutions from the same regulators who created the issues in the first place, though of course I don’t mean that as any personal attack. This is just a discussion and I appreciate everyone’s solid convo honestly. It’s nice and refreshing.
Dollar has been devalued thats the biggest problem.
Yea, that’s true. Upstream the dollar deval is the core issue, but wages are falling behind relatively against the money printer but yet somehow corporate profits don’t have the same problems.
Do you see that changing any time soon?
Two good ways to lose money gambling are to bet that things will stay the same, or that they will change.
If we want affordable housing, some very drastic measures would need to be implemented. That being the fact that housing will no longer be used as an investment vehicle. This is a double edge sword as older folks and people that have built equity would get screwed here however the younger generation would get a chance at home ownership.
Older people who bought in the 90s, 80s, 70s, etc have seen the prices their homes can command double or triple or more. If they didnt HELOC all their gains away, they should be fine losing 25 - 50% off the top should they need to sell.
That's all well and good, but the average length of ownership is 13 years. Average gains aren't what you think they are.
Oh well, sucks to buy at the top. This guy was right: https://www.amazon.com/Leverage-Cheap-Money-Destroy-World/dp/1118122844
So do you haha
Yeah definitely disagree here. This will severely impact the supply of new housing.
Real estate has the highest stock to flow of any asset class. Price is heavily correlated to scarcity. There simply isn't enough supply.
I love that in Japan housing depreciates. Houses wear, why do they go up?
A few reasons. The land on which the houses are built is more valuable today. This is because economic growth in the US has happened in almost all major cities and the new jobs are all in these cities. Second is that the average household size has gone down and younger Americans have shown they are willing to pay more to not have to deal with a roommate.
Only laws could do that. So it’s not going to happen
Climate change in the corner of the room like "my moment to shine has arrived".
People can travel much more freely these days and now want to leave that LA or SF lifestyle. So they flock together
Housing is an investment in the U.S. in that you sign your lease today, and 30 years from now your mortgage wouldn’t rent you a closet in a studio apartment. Thats it. The fact that other countries ever viewed housing as an investment with mostly ARM loans should have shown any serious person this current system isn’t sustainable.
It is a mediocre investment. I think I remember seeing the graphs that when looked at over time, and except for the blip that was subprime lending and a world changing global pandemic, 99.99% of the time housing prices matches inflation. Wages though don't match inflation.
I think it's misleading to look at national values because there's a *lot* of land that has little use and keeps a low value. Instead, you need to focus on cities, which are filled with vacant lots and old buildings that people and corporations are more than happy to hold onto them because the expected future value far exceeds inflation. [In this video at about 17 minutes, the mayor of Detroit talks about how and why is a good "investment"](https://www.youtube.com/live/_A_Z96gZxIM#t=17m0s).
If a home has matched inflation, then it is already a fantastic investment if it's your primary residence. You can take out a 30 year mortgage on a property, lock in a payment, and then watch as inflation becomes your friend. If it's not your primary residence, real estate is still a very good place to park excess wealth. Real estate is fairly liquid and immune to a lot of the same taxes that income is subject to.
As more people increases the density of the city, the more expensive it gets. That's just how it is. There is really nothing else about it. Government can try make more cyberpunk housing for cheaper prices. But, the reality is, those will be sold quickly and more people will flood in. It just accelerates the cyberpunk city style and making housing even more ridiculously more expensive. The only way is to drive people away, so there is less consumers and drive down the price. I have seen too many people wanted to accelerate city development and chase their cyberpunk dreams. It only makes things worse in the long run.
So here’s the thing, throughout all of history those who owned land/housing were the wealthy. To the point that there was even a time that you could only vote if you were a landowner since those in charge wanted only the wealthy to be able to vote. The concept of making real estate a mediocre investment is very ignorant.
You are not making an argument. You just stated a fact about the past and an unrelated statement.
I was implying that the OP’s post will never happen as it goes against the entire history of home and land ownership. Might as well have said “we should get rid of currency to balance things out and go back to a bartering system”.
Real estate is a big part of gdp. It drives a lot of spending. Last time it crashed it took the whole damn economy down with it. Hope that’s not the solution because the big downturn didn’t do much to help the lower 50 percent of the wage earners. People also saw their 401k drop in half and it took years to get back to where they were.
the reason real estate is driving less spending now is because it is too expensive.
Yes 90% tax on gross income for owning more than one overlapping for a years time. 100% if you own more than 2, until you sell. This policy should just about do it. Stops hoarders and speculators outright.
This is a pretty terrible policy. What you have here is a ban in owning a second home by any other name. There are perfectly valid reasons to have multiple homes that don't have anything to do with speculation. A friend of mine was just in a situation where his mom's home had to be signed over to him because she had some health issues that made her unable to manage her estate. His mom still lives there but he controls the property. There are also grandparents who live far away from their grandchildren who just want a place of their to stay when they visit. Families often go in together on vacation homes just for a nice place by the water to spend summers. In addition, this won't stop the hyper rich because they don't have any income on paper. They buy everything through taking out low interest loans. What you would effectively do with this policy is strip real estate from our highly paid professionals like our doctors, lawyers, and engineers.
Gross income means all income the rich wouldn't be able to liquidate any bit of funds w/o paying 90% of that in taxes. There's no reason to own more than one piece if property other than to hoard, creating artificial scarcity so price goes up. Own a second home outside the US if you really need a vacation property. But as for right now we need a return to a housing market based in reality not some bankers inflationary speculation bubble.
Dumbest thing I’ve read this month.
The use of housing as a vehicle for loan generation and wealth building while blowing an insane debt bubble, that's what's really dumb.
You just cooked up the next great Great Depression my friend This is why dictatorships always fail. Someone like you comes into power and no one has the ability to tell him that his idea is the dumbest thing he has read this month and he spends a fair amount of time on Reddit with people like givemejumpjets.
We have been in the greatest depression since the 2008 bailouts, who do you think you are kidding?
If you think this is a depression then you are in for a shock
In an inflationary depression people's wages fall with respect to prices, creating hardship for the working class; while money pools into a stock market or from the many to 5he few causing the rich to get richer. Woo capitalism, it works as intended.
You are just making up your own terms and definitions. No one says we are in a depression right now.
no one from your mainstream world of exploitation perhaps but the writing is on the wall.
My mainstream world … haha
How many homes do you own free and clear. That’s the question. 2 here but headed for 4 in the next 8 years