Comment by aynyc

Yeah, pretty sure a government won’t bail me out if I invested in a stock so much that it would crush me if the stock went down. If buying a house is an investment and not for living, then it should be treated like it is.

Whether a house is worth $400k or $300k is, sometimes, a choice the government makes.

It isn't always, but sometimes it is. Through regulations, through monetary policy, through other policies.

Now if the government decides that you, you personally, standardUser, are going to lose $100k, I don't think the government should bail you out. It's called "moral hazard". You lost $100k. Deal with it.

If the government decides that I, me personally, am going to lost $100k, I would say that I am old and I vote in every single election, and despite my failing memory, I will remember that lost $100k until the day I die and no politician who voted for that will ever get my vote again. I will remember who did that to me.

As someone that's bought their first house in the last few years, it's hard not to take offense.

A car or a TV are much smaller investments relative to a house. Over a decade of savings is tied up in my home. If the ass drops out of the market, myself, and others like me, who have broken into the market without assistance at the peak of housing prices will be virtually permanently financially set back. And to call buying a house around this time a mistake is crazy. I would be as much a speculator if I continued to rent and pay someone else's mortgage, hoping that prices dropped so I could get a good deal. It's a home and this attitude of treating homes as investments or mere purchases is why we're in this mess in the first place.

How is it fair to compare buying a house to buying a TV? One costs 500$ and the other costs 500k plus ongoing costs like repairs and taxes. Not saying you’re wrong, just that the comparison isn’t apt

Some loans require PMI if your outstanding balance is larger than the current value. PMI is very expensive and, unlike a TV or car, you might be forced to give up your house because it devalued too far and you can no longer afford mortgage and PMI.

I'm not saying we shouldn't make housing affordable, but it's worth considering the impact for everyone.

> If you buy a house for $400k, and suddenly it is worth $300k, you don't need to be "bailed out" for your purchase decision. You should have been certain that the house was worth $400k to you at the time of purchase. Otherwise you're a speculator, and we shouldn't be bailing out speculators.

Isn't that missing the forest for the trees? There's an all-out class war between the haves and the have-nots. If it controls supply like a cartel, and if it pursues rent-seeking like a cartel, then maybe the real estate moguls and speculators that treat everything like an investment instrument should be held accountable and liable.

You never know what your house or apartment or condo is worth, even to you. Maybe you can afford $400k barely, but you'll be hugely squeezed. Or maybe you'd get a bigger place if prices had dropped for your family size.

You hope conditions won't change. You can look at the current market trends to try to value it. But things will change in the next few years probably. You can guess, but you'll never "know with pretty good accuracy". The economy can go down, interest rates can change, major employers can come and go, there can be an earthquake or cancerous ground discovered there.

But, the convention in the US is that people see their houses as a form of savings. Realistically, we should account for that.

Also, if continuing the building ends up requiring some policy change (supported by changing laws and regulations)… it seems reasonable to protect normal people, doing normal things, from massive financial chaos that is explicitly caused by the government changing policies on them. At least for people actually using the houses as intended, that is, living in them.

If we go to a place where homes cost $400k then we're all buying at $400k, regardless of whether people understand speculation or markets. Once you allow enough people with deep pockets to do speculation or price arbitrage... then we're all paying it.

It's not that we shouldn't desire cheaper homes, but we should realize that people who paid $400k are largely not speculators. They bought what the market was willing to offer.

>It's called buyer's remorse. We accept it when it's a car or a TV, but suddenly when it's a house we're supposed to give massive government support to correct the buyer's mistake?

The difference is order of magnitude as proportion of net worth and the necessity of the purchase.

And it's not like the actual value has decreased. You still own the same house. It's the same size, location, build quality... That's the value of the house to you. If you're not currently buying a house, the price of a house should be irrelevant to you.

If the government passed subsidy laws or building requirements that caused your loss, then you might expect compensation. Did you disagree with bailing out small businesses shuttered during COVID and their furloughed employees? Same principle.

But the buyer probably didn't think it was actually worth $400k intrinsically. They were bullied into paying $400k because (1) they need a house no matter what and (2) at least the government guarantees that there will be a bigger sucker down the line who will pay $500k.

It's the government's fault that this bigger-fool game even exists, because the buck always stops there. They might want to consider compensating people for the misery they caused.

We (government) does debt forgiveness all the time. For very practical reasons. Can't some of the cheddar be redirected from the 0.1% to the rest of us?

A $400k home is probably a starter home. Owners are probably a young couple (millennials). They probably want to have kids.

Forgiving 100k of their debt means they (and their kids) will have a fair chance at success. Earning more money. Saving more. Paying more taxes (over their life times).

While at the end of the day I don’t think people should be bailed out, I don’t agree that everyone who over paid is a speculator. Many people are just wanting to own their own home. The market has been crazy for the last 5 years. Many people are just buying to own not to flip it for a huge profit. So when a new home owner buys something and suddenly the value drops $100k and the bank wants the money I do feel slightly sorry for them.

For the person who ownes multiple houses and buys simply to rent and flip a profit well I have very little sympathy for them. They are the true speculators.

Well those people vote. Home ownership rate is 65%. Home owners I believe are more likely to vote than renters. So yeah your proposition is not feasible

I agree in principle that we shouldn't be bailing people out for the consequences of making purchases with their eyes open, but if something like this happened, a lot of people would be mad. And I get it.

The problem in this eventuality is mobility: if you buy a house for $400k, live there for, say, 5 years and the resale value of your house is at $300k, that's going to be a big problem if you have (or just want) to move. If you sell at $300k, you'll have about $50k left over (after repaying the bank) for a down payment on your new house, which means you can only afford a $250k house, which may well not meet your needs.

If someone is planning to live in that house long enough such that when they do want to sell it, they can move to a new place that meets their needs, at a price they can still afford, sure, great. We shouldn't be bailing those people out.

> You should have been certain that the house was worth $400k to you at the time of purchase. Otherwise you're a speculator, and we shouldn't be bailing out speculators.

That's absurd. Aside from people who buy too much house ('00s, anyone?) and regret it later, people pay the price they have to pay for the amount of space and location they believe they need. Most people -- very understandably -- don't know the dynamics of the housing market to the point that they'd be able to predict that their resale value might go down by 25% at some point in the future, because, historically, that's just not what home prices do. (And don't parrot the "past performance is no guarantee of the future" crap... yes, true, so what. Most people unfortunately can't plan their lives around that.)

These people aren't speculators... speculators are buying to flip, or to hold and resell, as investment properties. These are just regular folks who need a place to live and have -- regardless of prudence or correctness -- bought into the idea that owning their home is the next life stage, a proof of success and well-being. Calling people like that speculators shows a severe lack of understanding and empathy.

> It's called buyer's remorse. We accept it when it's a car or a TV, but suddenly when it's a house...

A car or a TV costs nowhere near as much as a house. Losing a car or a TV is not going to make someone homeless. Housing is a basic need, and housing security is essential in a healthy society. (Granted, in many places in the US, losing your car can lead to financial ruin as well, sadly, considering how crucial a car can be to many people for basic things like getting to work.)

> If you buy a house for $400k, and suddenly it is worth $300k, you don't need to be "bailed out" for your purchase decision. You should have been certain that the house was worth $400k to you at the time of purchase.

I think it's pretty normal for rational purchasers to consider the resale value of something that they purchase, and hand-waving that away doesn't make for a very serious argument.

> If you buy a house for $400k, and suddenly it is worth $300k, you don't need to be "bailed out" for your purchase decision...we shouldn't be bailing out speeculators

When the speculators vote, yes, you need to bail out the speculators.

> It's called buyer's remorse

It's called building consensus. At the end of the day, if it costs making homeowners whole to gain their buy in to solve the housing crisis, that's money well spent.

I'm not saying what I'm proposing is fair or even palatable. But it's functional. If solving the housing crisis is more important than aesthetics, it's a good move.

House owners are just going to vote for harsher impediments to building.

This argument always comes up when discussing a specific place.

"Everyone would move to ________ because it is the best place in the spiral arm of the Milky Way", where ________ is Boulder, Bend, Austin, Portland, San Francisco, Santa Barbara, Hawai'i, Santa Fe, etc.... etc....

It cannot be true for all of them. So they all need to build and people will figure out where they actually want to live.

Bozeman, Montana, a small city of 50K people, is seeing falling rents because they built a lot of housing:

https://montanafreepress.org/2025/06/23/has-bozemans-rental-...

And it's very much the kind of small place where "everyone wants to live there".

Induced demand can only function if there's a scarcity to begin with, and it's premised on increased supply increasing affordability (that's the mechanism by which it works), but these axiomatic derivations don't matter because we have case studies (in MN, in TX, and now CO, a story we're literally commenting on). Empirical observations win.

That's why you have to allow large-scale building everywhere. Then the market will find its own level.

The inverse of this situation is that everyone lives somewhere they consider unpleasant because the rent is affordable there.

The megacities you mention are enormously economically productive per capita. All sorts of efficiencies pop up when a huge number of people live near one another.

> only if you believe that more capacity does not induce more demand

No, it doesn't. What you're describing is elasticity. It's a well-studed concept, and means that a 5% increase in supply will probably reduce prices by less than 4.8%.

(An interesting side effect of a government committing to a zero real-price increase housing strategy is it eliminates whole categories of speculative demand. I wouldn't count on this for policy effects. But it's another feather in the cap for pro-housing policy.)

Giving significantly more people a way to live a lifestyle they seek, while holding the cost of housing flat -- if thats the worst case outcome, that seems totally fine, and arguably a better solution than trying to crash the cost of housing.

I would imagine for most people, this is what "solving the housing crisis" means

Except that all the folks that left Austin to move to Denver makes the houses prices in Austin drop.

Now the folks in Denver who hadn't considered Austin due to high rates can move there and reduce the costs in Denver again.

A 5% increase in supply annually indefinitely would crash the housing market there, induced demand be damned. To put it in perspective, a metro area growing at 2% is killing it, the highest growth rate is Austin at 3%. Denver only grows at less than 1%.

Cheaper homes may induce demand, they won't induce a 5% growth rate.

You keep building until supply meets demand, regardless of what that demand is or where it comes from.

We don't have an infinite number of people available to move into housing. There are only a certain number of people who will want to move into a particular region, and that number will stop growing at some point.

Granted, you don't want to build too much and end up with a ghost town. There's a balance to be maintained, and I think housing should be affordable, not a race-to-the-bottom cheap as possible.

How much demand do you think CAN be induced? Colorado has 2.6M housing units for ~6M people. If Denver builds 20k units a year for the next 5 years, that would represent the entire state growing by 4% (230k people) off the back of one city alone. I guess that's not terribly unreasonable - if Denver was the only city in the country.

Except, it's not. Where would all of these extra people come from?

More to the point, Denver is already quite expensive. Where are you going to find another 230k people capable of paying even higher rents than folks do today?

Are there people who have been avoiding Denver because the rent is too high? I think of Denver as somewhere you go if you're sick of the cost of living on the coast.

Better to have good problems than to have bad problems.

Is you idea that people will be renting multiple units just for the fun of it? In large enough numbers to be impactful?

This is only true for two reasons:

1. House prices have risen consistently for the past ~50 years. This is an anomaly (various theories why, my favourite is because women entered the workforce so the income per household increased and we spend as much as we can afford on housing). If/when house prices stop rising consistently then buying doesn't look much better than renting from a financial perspective.

2. Existing laws tend to favour the landlord over the tenant. In countries where this is not true (e.g. most of Europe) and the tenant is favoured, then renting is not so precarious and has lots of advantages.

I lived in rented accomodation in Berlin and it's a completely different experience from renting in the Anglosphere (UK or Australia for me, I don't know about the USA).

For single family homes square footage alone has a fairly modest impact on housing prices.

Land, driveway, number and quality of fixtures, electrical hookups, cabinets, countertops, doors, clearing land, water, sewage, etc can be nearly identical costs for a 1,000 sf or a 3,000sf home. Many things like wall insulation and heating demand increase sub linearly with square footage.

Which is why home builders so heavily favor large homes by historic standards. This is slightly less true of high rises, but making the building wider doesn’t require more elevators, internal hallways, etc.

It’s actually quite hard to definitively quantify if renting or owning is better in a given area/scenario.

Obviously the case near me where the mortgage payment on a house would be $2600/mo but the rent for the identical one next door is $2000 is going to swing heavily toward renting, but there’s more to it than just that.

Maintenance is huge and real and people just seem to ignore it on the “own” side, but 5-10% of the value of the house a year in maintenance isn’t unheard of.