Re:California Approves Statewide Rent Control
by kortilla on Thursday September 12, 2019 @02:02AM
(#20948472)
You’re conflating “an investment” with “an exponentially growing investment”.
Re:California Approves Statewide Rent Control
by strstr on Thursday September 12, 2019 @04:17AM
(#20949180)
That's sort of the classic interpretation of investment. AFAIK, the first question most people ask about investments is "what is the expected rate of return (relative to the risk)?".
I would not describe my car as an investment, since it's basically guaranteed to depreciate. Housing could be expected to behave in a similar manner (although that would likely require a decrease in population growth).
Re:California Approves Statewide Rent Control
by kube-system on Thursday September 12, 2019 @09:57AM
(#20951469)
The value of the structure does often decrease over time. The land might be a different story, if it’s a neighborhood where people want to move. Location, location, location. You can get property that decreases in value too, just move into a neighborhood in decline.
Re:California Approves Statewide Rent Control
by manfredo on Thursday September 12, 2019 @11:35AM
(#20952670)
A good investment is an exponentially growing investment. Any investment with consistent year over year growth % is growing exponentially. Any investment that does not grow exponentially will eventually be outpaced by inflation and is thus not a good investment.
Society's expectation that housing is a good investment results in people taking on significant debt to buy increasingly expensive homes. The consequence is that homeowners have a huge incentive to suppress the construction of additional housing, to inflate the values of their homes. And when housing prices do fall, people's financial lives are ruined. Contrast metros like SF, Portland, and Seattle with places like Tokyo where homes can be bought for < $400,000. A big part of this is that housing is expected to be a depreciating asset: https://www.youtube.com/watch?v=iGbC5j4pG9w