Comment by ThinkBeat
2 days ago
There is an incredibly large lobby group who is fully invested in house prices rising or at least not falling, namely homeowners. and since most politicians at a high level usually own one or more houses, they are fully invested in it as well.
> namely homeowners
I'm a homeowner and rising house prices are terrible for me. Property taxes have doubled, and the prospect of switching neighborhoods (as one might consider doing for work, school, or other reasons) feels off the table given the high costs involved in the transaction, since agent fees are a percentage of the sale.
But some homeowners are to blame, at the civic level, where those who are happy with the way things are reinforce the roadblocks against affordable housing. Minimum lot sizes and anti-apartment legislation dissuade the pesky low-income riff-raff from moving in.
> and since most politicians at a high level usually own one or more houses,
That's a factor, but the bigger deal is that eligible homeowners ar 50% more likely to vote than eligible renters, and that doesn't even count that many renters are not event eligible to vote!
https://nlihc.org/resource/new-census-data-reveal-voter-turn...
> That's a factor, but the bigger deal is that eligible homeowners ar 50% more likely to vote than eligible renters, and that doesn't even count that many renters are not event eligible to vote!
Even if the data seems to indicate that's true, I do see this statement thrown around a lot without much granularity into the groups counted.
In your link, it's broken down into a few different groups, but in terms of renters vs owners I'm kind of less interested in proportion of people eligible to vote who fit into each broad category, and more interested in normalized categories. How many more people who didn't vote and are renters share a rental unit with someone they're not tied to long-term, or rent alone, compared to people who own alone or own in a long-term committed relationship where both people would be owners and likely to physically vote together, for example.
As in, is there as significant of difference between households of the same structure, income level, age bracket, in terms of voter turnout (a couple sharing the status of renting or sharing the status of owning). I feel like you'd be much more likely to vote if your spouse that you split expenses and responsibilities with also votes, whereas your roommate might not give a damn and it has nothing much to do with you.
Likewise if you own a 1 bedroom condo alone, does that show up as different than someone who rents a 1 bedroom condo alone?
It's a much bigger group than homeowners. Banks don't want housing prices to fall, since then homeowners start foreclosing and then banks lose interest payments and own undesired property. Cities don't want housing prices to fall, since they were counting on money from developers and property taxes.
I don’t agree with this take, we’re overly simplifying the nature of housing here. It depends on the housing mix as well. If the vast majority of the pro-housing prices crowd is heavily invested in single family residential then they should favour widespread upzoning and deregulation of apartments because that would increase the value of their SFHs through two mechanisms: 1) presumably single family homes will be destroyed so any remaining single family homes become more valuable and 2) every single family home is now a potential townhouse or high density building which increases the value a developer would pay for it.
Are there any serious objections to that line of reasoning?
No, what you said is mostly correct; but I'm mostly talking about not having home prices go down, which is different but related.
There are different kinds of homeowners. There are those who are flipping houses and directly betting that the values go up, which is the crowd that you're describing. But at least in my area of the world, the majority of the anti-housing crowd is just old and is more anti-change than anything else. Even if the value of their home skyrockets even more, they won't sell and move. Their complaints are more about noise, traffic, and "quality of life" than home values.
But assuming that the upzoning and deregulation doesn't happen, isn't their calculation correct?
Property taxes are relatively independent from the absolute value of the property. Only the relative value of a property to other properties in municipality determines property taxes.
In Nevada, it's a percentage (approximately 0.5%, varying from city to city and with other conditions, like commercial usage) of its assessed value, which is 35% of taxable value. Taxable value is the market value of the bare land plus the replacement cost for all improvements on the land, less depreciation.
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I live in California where property tax is fixed at 1% due to Prop 13, so I don't really know how it works anywhere else.
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> Property taxes are relatively independent from the absolute value of the property.
In most places they are not. What would even compel you to write something like this?
Property values are regularly re-assessed according to recent sales and a % of the property value is then levied as tax.
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I never see the NIMBY movement really engage with what falling prices would mean in practice. It just seems impossible to be allowed for any really duration over a large area.
I think a more realistic (but depressing) goal is modest loss to inflation (so prices go up by 1-2% less then inflation).
> I think a more realistic (but depressing) goal is modest loss to inflation (so prices go up by 1-2% less then inflation).
If you read between the lines that seems to be what Canada's approach to house affordability is going to be. Their leaders are promising housing will be more "affordable" but that the goal isn't to decrease home prices.
10 years of 2% is a real value decrease of 20%. that would be amazing!
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They are going down the same path of making a lower quality product available, then using deceptive averages.
I have not seen anything that would create a supply of equally desirable properties (compared with detached dwellings).
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> I never see the NIMBY movement really engage with what falling prices would mean in practice
It means the landed gentry lose, and the working class win. Unlike the status quo of the past few decades where the landed gentry make fistfuls of cash by doing 0 actual work.
Obviously housing prices going down will make some people's assets mixes worth less. That's why they fight to stop building housing. But that's true for lots of commodities and businesses too. Just because many people are invested in diamonds doesn't mean we have to ban lab grown to save diamond prices
If we can keep the price of homes flat for 10 years then homeowners won't get hosed (still increasing equity by paying off principle) and homes get more affordable (assuming steady inflation and wage growth)
Falling prices are bad for economy. Lending brokers, construction companies, material suppliers - all will be hurt if price falls.
The best solution in my perspective is to have stagnant housing prices so eventually general inflation will make housing cheaper.
Many of the home owners would win in a freer market because their land would be worth more.
There's also a large lobby group that is fully invested in building new houses, namely real estate developers, and since most politicians at a high level usually need large campaign contributions, they are fully invested in it as well.
This is not the problem. We should not castigate people who want to build homes and earn a rightful profit from that endeavor. The problem is the undemocratic process that is the town hearing. It is unreasonable to expect working families and young adults to attend week day, day time hearings to state their position on the construction of new homes or anything else for that matter. The atrocities of urban renewal by Robert Moses and his followers in the 50s and 60s which wrecked many urban and black urban communities, many of which still haven’t recovered, led us into this mess. The antidote was that all movements towards progress must be debated by citizens (mostly seniors as they are the only ones with the luxury of time) in a hearing format. The citizens able to participate are most likely not going to live long enough to see the results of their positions anyways. It’s a disaster.
You want to let rich outsiders make decisions about what happens to a community instead of the people who live there, because... town hearings are undemocratic. All those annoying old people are just going to die anyway, so it's really best to ignore them.
I think I've heard everything now.
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Are you suggesting that the problem with housing is that we are producing too much of it?
No, I'm suggesting that one problem with housing is wealthy real estate developers who have undue political influence.
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Yep. A town can become desirable after its residents carefully built its character and reputation, then suddenly apartment/condo developers want in.
Usually the town was made "desirable" by residents there from ~1890-1940, and the current NIMBY's are leeching off that. In most cases the desirable part was bulldozed in the 50's-70's to make parking for the suburbanites. Portland, OR had streets that could make you think you were in Budapest before they were demolished in the 40's
That's fine. On one hand the other saying "no" too much will stagnate the local economy, on the other a city doesn't need to accommodate an infinite number of people moving there. Either extreme will hurt property values in the long run, so there's a balance. I've seen places sell themselves out, I've also seen suburban sprawls where naive homeowners feel good about holding a house 20 years only to make 30% gain.
Nobody else should decide the balance but the residents who have semi-permanently set up their lives there. People considering where to move have no skin in the game, they can pick somewhere else if they don't like what they see or can't afford it. Developers at least have something to lose once they've set up shop, but they're still not raising families there. And by "should" I mean, I wouldn't buy a home in a place where homeowners don't have the most say. Those places do exist, and I'd only rent there temporarily.
This has just lead to Boomers getting a death grip on every city. Young people are forced to pay out the nose to rent the scraps of housing left, and then also get taxed to pay out the pensions of the same boomers because they moved all of their cash out of the bank and stocks to put in to a 5 bedroom house in Sydney so now they qualify for welfare.
What do you propose instead to allow younger people to buy homes, and if it were implemented, why would young people still want to buy a home under those rules?
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