> The homeowners are the ones getting rich.

If it's not an investment property then homeowners don't get any benefits from higher home value other than a larger tax bill.

>a larger tax bill.

Nope[0]

[0] https://en.wikipedia.org/wiki/1978_California_Proposition_13

Except in California where Prop 13 makes property tax grow slower than inflation (capped at 2% per year). The (in inflation-adjusted dollars) tax on any given parcel literally goes down year over year.

Prop 13 is slowly dying out as of January, though.

How do I buy a house that's not an investment?

Be poor. At least in California, Habitat for Humanity as well as several counties offer BMR (Below Market Rate) housing for people and families just scraping by. The way it works is you purchase the house a certain percentage below market rate, and when you sell, it also has to be a certain percentage below market rate.

If you sell for the same percentage BMR that you bought, the investment attributes remain unchanged. It's all proportional.

Different places may do it differently, but SF bases it off of a cap for the monthly payment for the mortgage. As interest rates went up this forced the price lower and some people had to sell at a loss.

Roughly its monthly payment => a third of 90-110% of AMI.

Buy a house in Japan. Housing shouldn’t be a nest egg.

Just because you buy a place for you and your family to live in, rather than "for investment", doesn't mean you won't still reap a massive profit if you downsize to a one-bedroom 20 years later when your kids are out of the house.

(Or if you retire to a country with a lower cost-of-living and no housing bubble, buying a similarly-sized house there for lower than the original purchase-price of your home in the US. Which is exactly how every retiree you see in e.g. Thailand lives like they do: they're not living off a pension; they're living off the "nest egg" they naturally accumulated by holding a house in the West for 20+ years before selling it to move there.)

Even if you never sell you can borrow against your massive home equity wealth, invest and make more money that way.

If they don't want the higher tax bill, keep housing prices down by allowing homes to be built. I really couldn't care less about the person who pushes up prices by blocking development having a higher tax bill.

> homeowners don't get any benefits from higher home value

You've never heard of a HELOC?

Although it would probably have paid off between 2010 and 2020, taking additional money out of a house with a HELOC in order to invest or spend it probably isn't a great strategy under a lot of circumstances.

I never understood why the person who owns a $1.8M asset is poor and the person who is obligated to pay a $1.8M mortgage is rich in these conversations

It has more to do with income and running expenses. That $1.8M that was bought in the 1960s for a few tens of thousands has appreciated, sure. But houses require maintenance, upgrades, and taxes that are in today's prices. Someone that old that has retired and is living on fixed income maybe can't afford those anymore and opt to move to a lower cost of living area. Thus they are forced out by the general demand for everything--basically being outbid by the influx of new residents. Relative to the person earning a lot and paying a mortgage, yes, they are poor.

California capped the tax increase to far below inflation.

Retired Americans are the only Americans who are categorically never on a fixed income.

I mean technically Social Security benefits are tied to cost-of-living and thus inflation and are not "fixed income". But that's just technically. My mother's retired and her SS is not a lot. There are a lot of very low income older people in America that fall in this category.

You need to differentiate between liquid and illiquid assets, because they represent different kinds of wealth.

The person with a $1.8M property holds a very valuable illiquid asset. They cannot convert the value to cash trivially (they could perhaps take out a home equity credit or remortgage the house). Effectively none of the value of asset is available to them to meet any other needs, and will only be fully realized when the house (their home) is sold.

The person who can pay the mortgage on a $1.8M property has substantial income and/or cash reserves, which are liquid assets and thus distinctly different from the property owned by the previously discussed person. They may not have a net worth of $1.8M but they are much more easily able to shift financial resources aound to meet their needs.

I would trade a million dollar debt for the inconveniences of getting a HELOC any day. Wouldn't you?

For the most part sure.

But there are situations where the HELOC will either be hard to get. For example, you may own the house outright but have very very low income. Or the bank may not be willing to view the land in the same light as potential developers.

"House rich, cash poor" is generally convertible into "have mortgage, and cash", but it is still a distinct condition from "Income rich, have mortgage", especially for low income folks.

If they sell their home and leave. Being forced out of your community is a rather perverse definition of “getting rich.” A wealthy refugee is a refugee nonetheless. That’s what getting rich means in this context— replacement.

That sounds like they should advocate for more homes so prices don't go up too much!

Yes. That’s definitely not a childish idea that seems to be based on the idea that you can will things into being simply by stamping your feet and holding your breath until the adults break down and give you ice cream.

>The homeowners are the ones getting rich.

Im a homeowner and this is just ludicrous. Rich? Please. This kind of added drama makes me discount everything you say.