Re:Stop Buying Real Estate in SF
by shkkmo on Friday January 15, 2016 @04:07PM
(#10912153)
Should home ownership really be the goal?
I've been spending some time recently thinking about alternative options to the rent/buy dichotomy.
Buying a house is in this weird category of quasi-investment that is difficult to offset. In no other market do we encourage consumers to take on debt when making an investment in a commodity. Most consumers are not able to hedge this risk so fluctuations in the housing market can wipe people out and ruin lives.
Renting a house is a whole different problem. The rental market can be very discriminatory, especially against people with poor credit. The friction and lack of information in the rental market prevents many renters from being able price in more than a couple of variables (usually just location and size). The upside of this is that there if little incentive to make certain types of improvements (especially improvements that decrease the utility costs)
It seems that there should be a better way to deal with housing that protects individuals against the risk of mortgages and property bubbles while still aligning the interests of home-owner and home-user.
I've been spending some time recently thinking about alternative options to the rent/buy dichotomy.
Buying a house is in this weird category of quasi-investment that is difficult to offset. In no other market do we encourage consumers to take on debt when making an investment in a commodity. Most consumers are not able to hedge this risk so fluctuations in the housing market can wipe people out and ruin lives.
Renting a house is a whole different problem. The rental market can be very discriminatory, especially against people with poor credit. The friction and lack of information in the rental market prevents many renters from being able price in more than a couple of variables (usually just location and size). The upside of this is that there if little incentive to make certain types of improvements (especially improvements that decrease the utility costs)
It seems that there should be a better way to deal with housing that protects individuals against the risk of mortgages and property bubbles while still aligning the interests of home-owner and home-user.