I am so baffled by this. Seems like a mental smokescreen for NIMBY homeowners to protect themselves from the realization that they are the problem.
If every landlord was murdered today and replaced with a homeowner, there would not be the slightest impact on either the home price crisis or its root cause, the artificial restriction in supply caused by NIMBY zoning and regulations.
In fact, the supply pinch would probably get worse. Big landlords can benefit from expanded supply if they own that expanded supply. Single-home homeowners see only the risk of disruption to their environment. A city full of single-home homeowners might never build anything, anywhere, ever again.
(Just in case anyone asks, I am not a landlord. I'd have to be a multi-millionaire to even contemplate it in my area.)
The stock market is overvalued and risky but so is real estate. I'm sure there are still lots of better-than-nothing companies to invest in.
You want to put money into things that are going to be making money in the future. Real estate is one, but businesses are another.
In general I would much prefer to not deal with real estate, but it simply would mean a lot bigger risk of a few unpleasant decades at the end of life.
If that's what you care about, it would be wise to consider the impact on society as well. Society doesn't do well when resources are only accessible to a wealthy elite, and a stunted society will hurt your childrens' future. So maybe it's not such a good idea for real estate to be a scarce, rapidly appreciating asset, if it leads to unaffordable housing and economic desperation for the masses, political instability, etc.
I'm not saying don't invest in real estate, only that the political conditions that make real estate a good investment may be bad for society at large.
Of course, they should pay market rates for it. Think of it as a private application of eminent domain. As far as I'm concerned, the rights of people to live in the homes they technically own without being extorted by a REIT who owns the land those houses sits on trumps property "rights" of REITs.
Worldwide this sort of thing does happen. Example: the UK system of leasehold/freehold.
This is circular.
A big part of the reason ownership is a barrier is that landlords—usually large corporate ones—own all the available properties in an area, and have exactly zero intention of selling individual units. This, of course, raises prices.
1. You ignore the big problem that buying a house shouldn't be the only way of finding somewhere to live. Like, that's just not realistic. You're 18 and you want to move out of your parents' house. Is your only option really to buy a house while working at Dairy Queen?
2. The idea that a market can be cornered like this is overly simplistic and history is littered with the bodies of those that have tried. Like anything, the pendulum swings back and forth on this. You only have to go back to 2008 to a time when the market was flooded with available units. What you have now is people who 100% have legitimate concerns that I support but tend to overstate the doom and gloom as being forever. Obviously that doesn't help them now but the idea that someone can forever lock people out of the housing market just doesn't hold water. Structural changes in the market will come along and change the equilibrium.
IMHO one of the most damaging things to the housing market has actually been AirBnB.
Why shouldn't there be houses—or apartments—you can afford to buy while working at Dairy Queen?
You know you could buy a home with 0% down. The government could back the loans and have very low interest rates on these loans. It’s all possible - but we’re stuck in such a strong capitalistic mindset that we ignore other possible ways of running the country and imagining home purchases.
There’s also no reason we couldn’t have the government building beautiful and delightful buildings that are also attainable for everyday workers. It’s because we are stuck in our capitalistic mindset and so anti-government that we cannot imagine other ways of doing things.
But it's totally doable btw. See China. They use eminent domain like a mofo.
1. We have expensive housing because we don't build enough.
2. We don't build enough because of anti-growth city regulations enacted by NIMBY politicians elected by NIMBY homeowners.
Corporate interests and billionaires aren't the ones that keep anything from getting built. They're your homeowner neighbors with lawn signs that say "NO ON EVERYTHING" each election season.
In a supply pinch, government subsidies just inflate home prices further, pouring more money into home sellers' pockets, the same way government-subsidized college tuition has poured more money into colleges' pockets. You can't solve a government-caused supply problem with government subsidies. Instead, you have to ask yourself the hard question - do I want much more housing? Do I want economically dynamic cities to grow, with all the problems that can bring? Most voters in these cities don't, and that's why we have the expensive cities we have. There's not enough to go around, so what supply there is goes to the highest bidder.
Now, regarding China - it relies heavily on private developers. The CCP learned decades ago that people just aren't motivated to work unless they own the rewards. This led Deng Xiaoping to transform China into an effectively capitalist economy ruled by a one-party corporate technocratic autocracy. The end result is that China is still owned by rich people, they're just rich people in the Communist Party. If you think money and power are uncomfortably close in the US, wait until you learn about the CCP! If the US government had the power of the corrupt Chinese political elites, Jeff Bezos could be disappeared for months (or forever) without any explanation whatsoever from anyone, and everybody would have to take it in stride. They can build infrastructure, yes, but it comes at a heavy price. And most people are kept out of the cities by the hukou system, which is NIMBYism on steroids.
I'm suggesting going further than that: owning property in that place makes you a tax resident. That means all your income is subject to state and city taxes. You'd still get credit for taxes paid in other states (as you do now for the most part) so you don't get double-taxed.
But let's stop giving tax breaks to people who reside in Monaco for tax (ie no tax) purposes and park their money in real estate in London, SF, Vancouver, NYC and Hong Kong.
1. Abolishing landlords is not the answer (I see a lot of people suggest this). Ownership is a barrier. Rental properties are useful. If there are no landlords there are no rentals unless you want the government to be your landlord. Nobody wants that;
2. Investment funds should not be landlords. Landlords should be local to the area. Likewise, no one entity should be allowed to have too much beneficial ownership of housing stock in any one area;
3. Real estate has special treatment for asset reporting. This needs to end;
4. If you own real estate in NYC, for example, then the city and state should deem you a resident of that state for tax purposes and tax you accordingly;
5. Properties without a clear beneficial owner (eg owned through layers of LLCs) should be taxed punitively in property taxes. You can have your anonymity if you really care but it's going to cost you;
6. Residents of trailer parks and mobile home parks should have the right to collectively purchase that park. There is a quite frankly disgusting effort by investors to buy up these properties and then extort the poor people who live on them (eg [1]). This shit needs to be illegal; and
5. This protection should extend to apartment buildings too. This is essentially the origin of the cooperative ("coop") in NYC. Today, coops still account for ~80% of apartments in Manhattan.
People have in the last 100+ years gravitated to cities for employment. Cities have a lot of advantages. But this has constrained supply of suitable housing stock artificially. There is a lot of cheap housing in the US still but not where it's useful. My hope is that the pandemic is a catalyst for a change that will allow people to move away from a few urban centers. Having more medium-sized cities in various regions is generally better for everyone.
[1]: https://www.newyorker.com/magazine/2021/03/15/what-happens-w...