Ask HN: Anyone else feels the commoditization of real estate is unethical?
I am reading more and more about startups which are focusing on investments in real estate [1].
Doesn't anyone feel uneasy about it, that more and more people are looking at real estate as a financial tool, not a basic human right to have a roof over one's head?
Aren't startups like this just adding oil to the fire which is the real estate market?
I do not understand how will someone expect for future generations to achieve their own personal freedom and living inside their own four walls.
[1] - https://techcrunch.com/2022/05/17/backed-by-forerunner-and-bezos-back-arrived-a-startup-that-lets-you-buy-into-single-family-rentals-for-as-little-as-100/
763 comments
[ 3.4 ms ] story [ 494 ms ] threadhttps://alabamapolicy.org/research/understanding-the-differe...
I agree with you, and I think what takes it apart is starting to think about the fact that humans are social, it is not really possible to be fully human apart from a community. The idea of an independent individual unreliant on anyone else as a starting point, which I think is the basis of this "negative vs postive rights" framework, is a myth, is not how humans work. The questions are what kinds of communities we want, how we want to relate to each other -- not whether to.
There are definitely people that don't think a right to a free attorney should be a right. There are also people who think that it's okay for this to exist but doesn't necessarily correspond to the same level of a right as a negative right like free speech. These are entirely consistent positions to hold.
Imagine if we did the same thing with, say, water: privatized it and then "democratized" ownership of it.
It's easy to get retail investors to buy things at inflated, speculative prices, so the price of water would go up. People would say, "Why are so many people dying due to lack of access to water?" And we would blame these startups, laws would be passed, and we would fix it.
Unfortunately the necessity of housing is not as direct and clear, and we have a long history of denying housing to people who are unlucky, sick, or the children of such people.
Lol we did that in England!
We're watching this happen before our eyes.
What we need is regulation to stop them from doing that, not a different company selling and capturing the water. That's just more of the same thing which solves nothing.
Commodification definition:
the act or fact of turning something into an item that can be bought and sold: The commodification of water means that access is available only to those who can pay.
>https://www.dictionary.com/browse/commodification
Nobody mentioned the US. Nestlé does this in various other countries.
>https://www.theguardian.com/global/2018/oct/04/ontario-six-n...
Are you not aware that fresh water from wells depletes sources? The water table is limited.
You seem to be intentionally twisting the scenario in a disingenuous manner. Nestlé is selling water that was once free to a populace.
Please quote my comment where I stated this.
I don't believe you have attempted to comprehend my statements, nor have you read the article I posted and are just making baseless assertions to be contradictory.
General consensus even amongst the right-wing media and the media that aims to appeal to conservative voters [1-4] seems to be is that we have drought and hosepipe bans while the private companies pay out £1b dividends and it's not right.
[1] https://www.thetimes.co.uk/article/54e5542a-1a6b-11ed-b1f4-6...
[2] https://www.guardian-series.co.uk/news/20604864.privatisatio...
[3] https://www.thetimes.co.uk/article/37ddb10c-157e-11ed-a669-5...
[4] https://www.telegraph.co.uk/environment/2022/08/09/water-fir...
I'm not saying privatisation has been a glowing success but supply issues were much worse in the days of nationalisation, especially when you factor in the population growth over the past few decades.
Here in Germany especially water is usually operated and owned by local municipally owned enterprises, and I'd say it's a huge success. Even my home district in East Germany (GDR) build a huge water infrastructure project with a dam, many kilometers of large pipes, and one or more (don't know exactly how many) water processing plants, definitely nothing privately owned there. People including those in power just put a very high value on having enough and reliable supply of water in Germany, and it has nothing to do with private vs. government, given what we have now with mostly local and state governments providing. In recent years a lot more private companies entered the picture, but I'm not sure about ownership (municipalities also operate their own companies), in the end it's an attitude question more so than blaming it of "private better". You can have success or failure with either model.
No wells to be dug, no neighbors to beg from, and now that the Colorado River is dangerously low they are stopping the delivery trucks.
This means people will have to move eventually, and good luck selling your 1.5 million dollar home with no water access.
Lol, California has 'severe drought conserve water' as all the businesses keep watering their 100% unnecessary grass, Nestle bottles it up and sells it back to us, we have almonds being grown to make fucking almond milk, and we have strained power grids warning of high power consumption while every fucking business leaves their signage and parking lots lit up like fucking Christmas.
But it's we the people taking showers and running the AC that is the problem.
None of this makes any sense!
I see some broad parallels in this line of rhetoric to "Zeus brings misfortune because people are impious vs good fortune when they are worthy". It presumes a difference and a drive that is not there. All assets are both speculative and non-speculative at all times. There are no assets that cannot be bought speculatively and a house is always going to be an asset because it represents a big investment of capital.
If people are speculating on real estate, all that says is that the policy of an area is going to make housing rare vs the number of people who need housing. If people thought housing was going to be abundant they would not speculate.
There are problems in the housing market, but they are not to be found by worrying about people acting speculatively. People are responding to the real problem, whatever it is.
We should do both. Build more housing and crack down on speculators.
Cracking down on speculators won't help people get roofs over their heads. Nor will calling them unethical. Speculators are the signal for whether there is going to be a housing problem in a few years time.
We should want a system that allows speculators and encourages them if there is going to be a housing problem so there is plenty of warning. Targeting speculators in particular is the old once-a-metric-becomes-the-target-it-becomes-a-bad-metric problem in a new guise.
/s
When the speculators run out of bigger fools the bubble will pop.
Crypto can at least just be purely speculative without really hurting anybody but it's not good for housing.
For example, a speculator moves into a nice small village, sees potential and brings in a lot of foreign capital in a short amount of time. Buying up houses and outbidding potential new citizens. The price of land is also driven up from this, even if it's only a short term thing.
The damage has been done there and it had little to do with the number of houses. It was just a hostile takeover of a community.
If you introduce a land value tax equal to the value of the unimproved land, this will kill speculation, but also make it instantly impactful to the citizens that there is not enough supply. This will mean that the people able to change the zoning of the city will instantly see a reason to change the zoning, as better zoning means more supply means lower taxes.
We don't need no speculation.
[0]: https://news.ycombinator.com/item?id=32350657
By this reasoning nobody could own multi-family properties because that would be considered speculation.
Because the only difference is this involves single family homes which are going to be rented out, an act that I’ve never heard called speculation. Of all the predatory tactics Silicon Valley gets up to (hello Uber) this isn’t one of them IMHO.
I’m not sure where people think the houses that get rented out come from but I can guarantee that it isn’t people who are running a charity to provide housing to needy families. They invest capital in real estate with the sole intention of seeking a return on said investment.
No, just building more housing will make housing less useful to speculative investment, and so speculators won't invest. Just reverse the messing with normal supply and demand. Don't apply ever more patches on top of patches to fix a situation that wouldn't exist without the messing in the first place.
Sadly, it is very hard for politicians to a) want to decentralise control, because it's much easier to declare a new controlling initiative than to say "actually, we're just getting in your way" and b) get to decentalise control, because it's much harder to argue strong economic principles than appeal to special interest groups who might vote for someone else.
As far as I know, NOTHING.
Be kind. Don't be snarky. Have curious conversation; don't cross-examine. Please don't fulminate. Please don't sneer, including at the rest of the community.
Comments should get more thoughtful and substantive, not less, as a topic gets more divisive.
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I can complain because corporations enjoy purchasing advantages not available to individuals. Massive amounts of capital, for one thing, not to mention tax breaks and economies of scale that make it easy for them to dispense with financing and inspection contingencies.
When an elderly person dies and the children who inherit his property all live out of state, they're going to dump the property and split the proceeds. And they're going to maximize those proceeds and minimize the time to realize them. Corporations can take advantage of that.
So no, WE did not decide to sell. Think it through.
so you do agree that it is the individual that made the decision to sell, and that it isn't because the corporation is forcing them to sell.
Therefore, the character changes or selling is really just a sum of the aggregate behaviour of all of those individuals. It's like blaming the flood, when each individual rain drop is the reason for the flood in the first place.
The 30 year mortgage is one of the greatest inventions in the history of mankind. Being able to swing hundreds of thousands of dollars of margin on a near-zero-down investment that requires nothing more than proof of income and has a manageable monthly payment is the single most powerful financial tool available to the vast majority of people.
That kind of leverage is only possible with the commodification and securitization of real estate. It’s not a perfect system, but it has led to intergenerational family wealth accumulation among the common population more than anything else before.
That's somewhat understandable given that the alternative is pretty much writing a monthly rent check. In that respect, it's a bit different to my mind than an auto loan. (Maybe if you compare it to a lease.)
If you didn't have 30 year fixed mortgages in the US, property values might indeed drop somewhat. But it would mostly advantage people who had access to other capital. People who can't afford houses in expensive areas now mostly still wouldn't be able to.
Being able to lock in a low interest rate for thirty years, the probable lifetime of the amortization period, is very advantageous. Combine this with a lack of a prepayment penalty and American mortgage holders get a great deal.
Don't like almond farms, bottled water companies pumping millions of gallons for the price of a $200 permit, and golf courses watering their courses during a drought? Then you should too.
Imagine, if you will, when the Texas grid went all wonky and those people who choose to buy power at open market rates had to prepay for their $13,000 kw/hr electricity because the power company had a limit on how much credit they will give you. Now imagine a drought where there is a disruption in the water supply because a pump burned out due to record setting high temperatures.
I’m no cheerleader for big government but if people insist on having one there are valid activities that they should engage in to protect the citizens from getting bitch slapped by the invisible hand of the market. This being one of them considering how capital intensive it is to provide a reliable water supply.
Hm, maybe we can do the same thing with Air. We can even keep the same name, Airbnb, but this time people are paying for the best air.
It's simply unimaginable what it's done in cities across Europe too. I lived in a few places like Barcelona, Dublin and Berlin, and it's pretty much destroyed any rental opportunities for young people and artists. I'm all for regulation, including taxing them to make longer term rentals more profitable for owners.
The solution to that is the same as the housing problem - build more housing.
And it's fine if the new housing is "luxury" housing - then yesterday's luxury housing becomes today's not-so-luxurious, etc.
Keep doing it until the problem goes away. It will eventually.
Why would that be desirable?
What kind of ridiculous argument is this?
But they have the least personal financial freedom, is my point.
The lack of freedom derives not from imaginary mobility constraints, but from the provision of shelter coming from a 3rd party landlord. Your roof is resting on the whims of a profit motive for someone who owes you nothing.
You can't see how that presents a fundamental lack of independence?
what whims? I have a lease for X months. Yes all bets are off after that. No one is acting on whims.
Homeowners are also at the whims of cost of labor to make essential repairs , cost of necessary appliances , property tax increases, employment opportunities near your home if you lose your job and whims of the banks that can foreclose your home.
Nothing in life is a guarantee . Owing mortgage payments to a bank vs renting isn't more freedom. Renters can become homeowners if they want and homeowners are forced to become renters ( remember 2009 ) . So i don't really understand what 'freedom' being a homeowner gives you. Your financial status give you freedom not your home ownership status.
When you rent, you just give the power of choice away and have misaligned incentives (when you own, you give more of a shit than when you are merely extracting profit)
Things like internal plumbing, internal wiring, air conditioning and appliances.
— Thomas Paine, Agrarian Justice, 1797
But property tax also taxes improvements that the owner made themselves. This disincentivises improving land too much.
The whole thing with Georgists and a land value tax is that it's specifically unearned wealth due to increases in unimproved land value that are taxed more.
Your argument confuses cause and effect. People that gain large benefits from the state do so because they are rich. And because they are rich they can afford expensive land.
"In theory" because in California there are strategies for doing renovations without triggering a reassessment.
Land value taxes encourage development because the tax is levied on the _unimproved_ value of the land, so you're incentivised to maximize the value of the improvements of the property.
At least that's the theory.
Maybe you're referring to the renting vs owning aspect of it that is potentially bad. In which case I would refer you to other countries' housing systems, and look into georgism/the land value tax.
I think this thinking has done more harm than corporatization of real estate. Owning a home has a outsized emotional impact on the psyche of regular Americans. Buying a TV isn't a life event , is it? nimby thinking is just downstream from this thought.
I think corporatization trend will finally disassociate real estate as the only wealth building tool for regular people. Cancel all the govt subsidies, lift all the nibmy restrictions, let the home commoditization begin for real. Lets start building homes like any other commodity.
What valuable service would that be, I wonder. Having a signature on a deed?
Also nice, argument: "my opinion is right and anyone that says otherwise is wrong". x)
> slum·lord (n)
> a landlord of slum property, especially one who profiteers. "Can you rent to the poor without being a slumlord?"
It's my understanding that barring regulatory requirements for standards of living, at their core a landlord is providing access to previously un-utilized monopolized space. That's not really a valuable service, in my mind; maybe it is in the way that 'we'll give you protection from ourselves coming back and breaking your windows' is a valuable service.
LLC is a corporation.
Cite? In all parts of the globe or just some?
> renters can only rent if they can pay.
Well, I mean, where the word "landlord" European feudalism, this was not exactly the relationship. The landlord took a portion of the peasants production, but non-producing members of the community still lived on the land too.
I'm not sure what you mean by "special". But it's certainly not unusual for people to exploit other people, sure.
Ambrose, c. 350
The implication being that the only rent seeker will be the state i assume
- Houses are way bigger than they need to be
- Their footprints are enlarged further by useless setbacks and lawns
- A single household monopolizes this footprint for the entire vertical dimension
Unfortunately, people have somehow been convinced that house price inflation is good because their house has more and more value, like a wheelbarrow of inflated currency and that the only fix is for everyone to buy their own house/land, which only worsens the problem.
With money, all actions take on a dimension of moral hazard. You pay for a thing, but you do not do the work, so you don't know how it is done and what effect the work has on the worker or on the world at large.
If the altruistic angle doesn't appeal, consider the selfish angle: money divorces you from the reality of an act, making you less able to do for yourself.
Like the Amish, I suggest that you carefully consider what you pay for and why, rather than just decide based on whether you can pay for it.
https://en.wikipedia.org/wiki/Tragedy_of_the_commons
This theory is called communism and it is one of the deadliest ideas known to man.
That said, there's an element of truth to the statement. There would be no such thing as rich and poor, there would only be poor.
Even if someone gave land to an individual, many would lack the ability to actually have a home constructed without saving for many years simply due to the cost of materials.
Here in Barcelona the market is screwed by shitty foreign investors with seedy letting agencies that totally ignore the tenant's rights. It's all about the money
That doesn't mean you can't have exclusive use of some part of it, how else would we encourage people to take care of the land and develop it. But you should continuously pay everyone else for it's exclusive use. Inherited, and corporate (basically immortal) land outright ownership is immoral IMHO.
So pay rent to the state instead of a private landholder?
I found your first paragraph very agreeable and convincing, but this feels like it's just passing the problem on up to the state. Would you just be suggesting that any ownership of land outside of a a single home or apartment be heavily rented/taxed to the government, or literally all use of space used exclusively (e.g. a private bedroom)?
If the land belongs to everyone, but you want to occupy some part of it exclusively, you need to pay everyone else for the privilege. Not just one individual who happens to 'own' it through various historical doings. I'm not sure how you can 'pay eveyone else' except through some kind of 'state' mechanism.
You pay rent to the people (via the state, which acts as a layer of indirection) who no longer get to use the piece of naturally occurring land that you're monopolizing.
Think of it like finite natural resources. Who really owns that? It's a gift of nature. Nobody made it. So if one person wants to dig those up and sell them, part of the proceeds should be shared with everyone. Because it's not even their property, so they have no moral right to privatize 100% of the gains in the first place.
Now if someone puts effort into transforming those resources into something more useful, then they should own the fruits of that labor. The distinction is labor (the fruits of which I should own) versus naturally occuring thing I had no role in making (which I should not own).
What would be your proposed solution to this problem, as in how would you remake the real estate market in the US? And perhaps more importantly, how coherent is your solution with the US as it is today?
I do not say this with the US in mind.
I personally think that primary residences should have a 100% homestead exemption, because I don't think you should have to rent your home from the State. And to make up that percentage of income, other real estate should be taxed a little higher. At the same time, there should be intelligent programs in place to make it easier to reach the point where you can own that first home. This last point would undoubtedly work best if there were either financial and/or statutory restrictions on ownership of residential real estate for investment purposes. So, in principle, it makes perfect sense as part of a larger goal of promoting home ownership. The conversation of how to best do this is of course more complex and there are many factors that need to be balanced - more than anything because high taxes raise rents, which would point towards regulation as an important part of the best way of dealing with this.
So...council estates? Subsidized housing is a thing we have.
>realize that property rentals are a necessary service that is handled pretty well by the private markets and that landlords are no more or less deserving of earning a profit for the service they provide and risk they take on?
Landlords don't create added value. I'm skeptical that it is a necessary service; housing is necessary, but is renting housing necessary? Why would that be?
Without the profit incentive, what developer would build a multi unit apartment building to achieve higher density living in cities?
A developer still has a profit incentive; mostly the same one they have now, actually. They sell the apartments.
I see that you are saying you would simply sell the apartments instead now. What is the solution for (e.g.) new grads who do not have a down payment yet? Why aren't tenants currently pooling their money, purchasing the properties they live at and converting it to a Tenancy in Common?
I do not think prices will drop without a rental market. Prices might even increase because you are making the market much less efficient. It will also make building new units more difficult as there will almost always be a holdout in the building.
There are many cases where this isn’t true. Many (most) residents in urban areas are transient. They stay for a couple of years, get married, then move to the suburbs or another city to start a family.
There are a bunch of other reasons why someone wouldn’t want to stay in a location for a long period of time.
Rentals absolutely make sense in this situation.
Subdividing your land and making it available to others is valuable. The world without that is all single family homes.
Without speculators leeching off of them, 20 year old two bedroom units would cost less than they currently rent for each year.
Make property investors actually invest something by only allowing profit or rent on land that has been recently improved.
They take otherwise-purchasable properties off the market, then make money off preventing other people from owning them in perpetuity.
Some landlords also offer property management services, but that is a separate field entirely. It would be fairly easy for an apartment building to consist of entirely owner-occupied units, who could then join together in a co-op to either put individual local contractors on retainer for things like plumbing, electrical, and miscellaneous repair services, or find a one-stop-shop company to hire for it.
Instead of taxing based on who owns the land, tax how it’s used. That way more units will be built increasing supply.
But then you’ll run into the real problem, not landlords, regular home owners who largely have a revealed preference to live on giant plots of land, in big houses far from multi unit dwellings. They’ll continue to use restrictive zoning to limit supply and keep prices up.
Homeownership is all well and good, but sometimes you really do just need a place to live for a year or two, and having to do a full-fledged real estate transaction at each end of that period is a lot of friction.
The thing we are dancing around in this thread is do landlords largely determine the housing prices. I think not. I think it’s supply constraints and government subsidized mortgages. These are largely issues driven by regular home owners not landlords.
Also allowing benefiting from or even rent seeking on only the increased value of very recent property improvements (like taxing at the value it held 5 years ago with some buy-or-sell challenge type provision to prevent undervaluing).
Any residence you don't live in as your only exempt residence for at least 2 years out of 5 is taxed at 100% pa. Any land with above median value is taxed at a progressive rate if you do live on it.
Any commercial building you don't work in for a similar period is taxed at 20%
You want to develop? Fine. Just have to make sure someone else owns or will own the land/strata before you start and charge them for the development.
You want to rent out a building? Fine. Put it on someone else's land and if they don't renew the lease you have to remove it or give up claim to it.
As long as at least one person is willing to assign their land claim to the project it could continue without that portion taxed, and acquiring or renting the claims would not have to be coupled to funding.
Modelling land as a fungible commodity that you're allowed to have as much as you want of is stupid and is just gifting a large portion of the productive output of society to those privileged enough to take on debt and those with the magic loan wand. There are plenty of other systems historically and currently that aren't as insane.
Without the assurance that someone else would shoulder the risk the builders would have walked away. Like they do in China, and where they have to demolish half finished towers because the builders dropped out and none will take it on.
Higher capital gains tax for investment properties to discourage speculation.
The rationale being that it’s perfectly fine to own investment real estate as long as it’s being occupied. Short term speculation incentivizes unrented property (look at any city in East Asia). Incentivizing longer holding periods makes it more likely that the property will be used to extract rents (that is, actually house people, which is what you want).
I think it would also be nice if there were some kind of scheme whereby property tax is low for a first home, but increases when you own more than one.
In Hong Kong, we spent over half of our income for rent [1]. Median per capita floor area for accomodation of 15 square metres, with some people living in subdivided flats with per capita floor area of 5.3 square metres [2]. The average waiting time for public housing is 6.1 years [3], note that public housing are government provided housing available with lower rent for low-income households, which are much cheaper and larger than subdivided housing mentioned previously. The median house price is about 20 times the median family income [4].
Yes, we know that this is a problem. But the government officials don't have incentives to tackle this problem. In fact, about 1/5 of the government income comes from selling land [5], so they probably can't fix this problem and keep the same spending without increasing tax. Let alone many officials are related to this sector or hold many properties.
[1]: https://www.thestandard.com.hk/breaking-news/section/4/17694...
[2]: https://www.bycensus2016.gov.hk/en/Snapshot-09.html
[3]: https://www.scmp.com/news/hong-kong/society/article/3177511/...
[4]: https://www.chinadailyhk.com/article/119131
[5]: https://www.budget.gov.hk/2019/eng/io.html
That's what OP means about there not being an incentive for the government to lower cost of living. The high cost of living is subsidising HK's notoriously low taxes.
There's a pretty good YouTube video about it: https://www.youtube.com/watch?v=hLrFyjGZ9NU
Oh and to answer the question, the solution is to zone lots more high-density residential, sell a lot of land for less money, and stop subversively taxing the poorest citizens via high CoL. Tax businesses and the wealthy to make up for it. But they're not going to do that, because low taxes on businesses and the wealthy is their USP.
Turns out when you optimise a city for business wellbeing at the expense of citizen wellbeing, then it impacts citizen wellbeing...
[1]: https://en.wikipedia.org/wiki/Lantau_Tomorrow_Vision
In the process, it makes land completely unappealing to rent-seekers while incentivizing high-density development of desirable locations.
This is only a problem if you believe older folks should continue to live in big luxury houses for a pittance (read: gain the benefits of luxury without having the detriments of luxury), or the country does not have enough smaller housing for them to move.
In situations where housing is severely constrained at the cost of younger people, leaving old people in their large houses should be the last of your concerns. Doubly so for any social structures where older generations are extremely reliant on younger generations (almost every democratic, socialist or communist country).
(Also... they are not the only business that is unethical).
And one of the most regulated and subsidized markets...
"socialism" =/= government intervention.
Having one element of a nation state being characterised as socialist doesn’t not equate to socialism… the world is not black and white..
This is utterly untrue for real estate, which is about as non-fungible as you can get.
I think the issue is that housing is intrinsically tied to real estate, and real estate (at large) likely won't become much more fungible. Land is just really complicated, and the uses for it aren't all that exchangeable.
A governments 2 main assets are its people and its land. Ensuring that people have ownership of the land ensures the people will continue to support the government as there’s mutual interest. So subsidizing loans via guarantees isn’t socializing so much as the government investing in itself and protecting its assets.
In a free, capitalist market, private providers would price and provide mortgages. This is not happening here..
For some Americans this may be difficult to digest since there may be cognitive dissonance…how can an American ideal be characterised as socialist.
A socialist government would either ensure everyone qualifies or it wound instead build large dehumanizing concrete towers to stuff thousands of people in, block after block.
Having traveled across many countries in Europe, I have seen governments with socialist traits make rational, sensible decisions. Again, while I agree that a capitalist government is probably more effective than most communist governments, the world is not black and white.
Right now the supply of those two good and their general dynamics are totally different. Landlords can effectively extract maximum profit from a property without doing anything to improve it or remain competitive thanks to zoning restrictions and other things that make increasing supply difficult. Thanks to this set up, landlords effectively wind up capturing the capital gains that arise out of public improvements (like adding a new neighborhood park) as well since it makes the area more desirable without increasing supply.
In the most desirable areas you can literally do nothing as a landlord and raise rents almost perpetually.
Worse once these landlords raise rents it causes negative effects downstream. Producers of other goods that rent their land need to start charging more to pay the landlords.
The number of people that try to justify some kind of late pseudo-feudalist system like this is legitimately insane.
Very clever idea.
Taxation was never a solution to any problem. It was a way to mask the problem in a very populist way. Taxation purpose was a redistribution from 'evil crooks' to poor, unlucky people.
The problem with Taxation always was that the middle class was paying this because the rich ones had plenty of solutions not to pay including with moving to an another country
Yes. yes it is. She's made millions for doing nothing useful.
> the rich ones had plenty of solutions not to pay including with moving to an another country
How does a rich land owner avoid paying a land tax? Or a tax on the value of his copyrights (which would be land)
Yes the middle class get shafted on things like income and capital gains based taxes, that's the great thing about a land value tax, it taxes the immovable land, not the movable person.
Simple as fuck logic. She bought the property, not a license there for living up to her ends.
The thing you are here presenting is a tax of not realized potential income. It's diabolical insane idea.
If we can do it for real estate, why not for cars, and any idea property?
You basically want people buy a license for living in their flats.
About basically nor useful, she earned the money, paid multiple taxes for this and she bought this from the real property dealer / construction company which hired many people for this.
Isn't this tangible contribution for society?
All because people like you flocked to her location for work what used to be peaceful, quite suburbs
For someone else to live in that house they would have to make a fortune to pay it in rent. She could choose to move somewhere cheaper and have a massive income from either selling it or renting it out, but she doesn't, she's become rich because other people are making the area valuable.
You can also do literally nothing even if you want to because of zoning. Remove all the market distortions and watch rental prices drop.
Call a contractor and see how much they charge for permitted work.
So I'll tackle this...
Food is highly responsive to market pressure because it is nearly entirely fungible. I'll throw this here for the sake of making sure we're on the same page when I say that
---
Fungible: able to replace or be replaced by another identical item; mutually interchangeable.
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So food markets are sensitive to pressure because there is hardly ever anything special about the food any one entity produces. Someone charging too much for corn? Go buy identical corn, that fills exactly the same need from any one of the thousands of their competitors. "Organic" was, in large parts, an effort to make food that is less easily replaced, and is mostly marketing rather than quality or health related (seriously, go google some of the chemicals that we allow to be added to organic food).
In contrast to food - Real estate is very rarely fungible. A specific plot of land has characteristics that often make it very hard to replace. Whether that's proximity to people or locations or features themselves such as soil, water, grade (slope, slant), existing structures, mineral presence ,etc. Non of those are consistent between different plots of land (there's a reason "Location, Location, Location" is a saying).
So no - Personally, I don't believe that real estate will ever be able to be treated in a similar way as the food market. Desire for it is predicated too much on aspects other than mere "acres" of it that you can get.
Imagine if just finding the right steak to eat was enough to make you rich for life, or if that ear of corn was where your family has been buried for centuries, or if that lima bean reduced your commute from a 2 hour drive to a 5 minute walk. I think we'd see pretty insane food prices then as well.
All you are saying is "imagine if food supply was more constrained" with more words. Commodification and constrained supply are orthogonal concepts -- the argument here is that increased commodification may lead to increased supply, so long as the market is allowed to act freely.
> that ear of corn was where your family has been buried for centuries,
This argument of "what if your family lived there before" in housing discussions annoys me to no end. We don't live in a feudal society where the right to a particular village is passed down through bloodlines. The fact that your family lived somewhere in the past doesn't entitle you to anything; you're not a Hapsburg monarch.
It's NOT about right - it's about demand. It's not relevant at all if it annoys you, the issue is that people can and do form sentimental attachments to the places where they live, and those attachments influence their willingness to pay (or hinder their willingness to sell).
And no - I'm not saying "imagine if the food supply was more constrained". I'm very clearly saying that food is fungible (you know - the thing I actually said...).
The housing supply is both constrained and non-fungible. The food supply can be constrained or not, but it's fungible as all get out - For the purposes of not starving, a calorie is a calorie, and where it comes from is irrelevant in a broad sense.
Sure, that's fair. I'm really reacting to arguments about gentrification, where people do talk about "rights" to stay in a particular neighborhood that apparently get passed via genetic material.
> I'm very clearly saying that food is fungible
My point is that the reason "fungibility" is important is actually because it impacts supply: there aren't just 100k houses vs 100k households, there are actually 10k houses with some desirable property (close to where most people work, sufficiently large to raise children, whatever) vs 50k households willing to pay a premium for that desirable property. Your point about fungibility doesn't change the conversation about supply and demand, it's just a partial explanation of the mismatch.
> I'm really reacting to arguments about gentrification, where people do talk about "rights" to stay in a particular neighborhood that apparently get passed via genetic material.
What is it that bothers you about this? Basically - my counter argument is: If a person has been living in an area for decades, and that area is now gentrifying, can't it be reasonably expected that person (or their family) were fundamentally a part of driving that gentrification?
It means that person was putting in their labor and money into that location for decades, and that labor and money was key for creating the conditions that are allowing for gentrification (even if the final catalyst was something else - like a company using the stable area for new expansion)
Simplifying - My counter argument is that forcing this person out is robbing them of the fruit of their labor: A nice neighborhood. They were there when it wasn't nice. They worked in making it nice. Now you kick them out because they were working with a lower income to do it (usually meaning they put in considerably more "sweat equity"). Seems pretty unfair to me.
The claim that housing is fungible is absolute non-sense, though.
If it were, we wouldn't see such drastic market variations, even within relatively close geographic markets (in some cases, literally blocks away)
We also wouldn't see such an intense pressure on evaluating real estate before purchasing (because if it was fungible - it's all the same, right?).
I basically don't know where to go in the conversation if you can't actually acknowledge the argument in front of you, and just say "No".
How much grain is watered with depleted groundwater? How much produce is dependent on the Colorado river?
When I moved to Manhattan, I was shocked to see how many apartment buildings that are only a couple floors tall and don't have elevators. I assumed every building in Midtown would be at least 50 floors and house thousands of people.
Counting the office space, which is completely unnecessary when people can work from home, even the densest neighborhood of America's most populated city has tons of room. I would bet that we can fit 20 times more people in Manhattan if we got rid of the height limitation laws and converted all the offices to apartments.
On the other hand, when we consider the average suburb there is a ridiculous surplus of land. We could fit the entire world population into Texas if we used it more efficiently.
Biology does not care about our philosophy; it allows emotional bonds between officials and elites that are leveraged against the masses.
Write on paper all the rules you want, collusion will happen.
Your defense of this system that’s also screwing you is bizarre; conviction to spoken traditions versus actual analysis. Very brain dead following orders of you. Very religious missionary of you. Human biology is easily convinced it’s spoken words of power are what rule the world.
I mean so it is; if you get burned by it, oh well. Remember; if this system takes your life from you, none of us have an obligation to you.
It does bother me
Yes? Most people who have ever lived have always produced their own food. That most of us in the developed world have lost the ability to do so—and that access to the physical essence of our being is dependent on monetary transactions with faceless entities that value profit above human life—seems deeply alienating.
This website[0] lists 18 companies in the property equity category, and I know of at least 1 more reputable firm not on the list.
The reality is that low yields, tax changes, and new regulations have recently made being a small time landlord a lot less attractive, which inevitably means big companies with economies of scale and tax efficiencies are going to start moving in on the industry.
[0] https://thecrowdspace.com/directory/real-estate-crowdfunding...
If the investment vehicle is detached from the people who live in the homes, then I fear we loose touch with the humanity of the occupants. The slum lord is sociopathic. Home real estate investment vehicle yada yada’s will trend systematically in the same direction. A race to the bottom of inhumanities and language similar to real estate listing euphemisms—
‘quaint’ : cramped :: ‘quaint’ : single mother with four kids and drives for snoober.
If you actually want to do something about it, advocate for zoning reform. People buy SFH because the lack of MFH in some areas makes them a pretty sure bet appreciation-wise. If developers were more free to build duplexes/quads/ADUs or larger, the increased supply would theoretically lower rents in the area and make SFH less attractive as an investment vehicle.
Your proposal is insane. They've paid 600 dollars (rent control) a month for (let's say) 10 years. 60k buy in for a quarter of a 1.2m dollar property? I'd take that deal as a renter.
If my tenants lose their jobs they get six months free rent while I go through the eviction process. If I lose my job and can't get another I have to sell my property for a six figure loss.
I can make this property a single family home or I can make it available to other people as housing that they can't afford to buy outright. I don't understand the landlord hate. They can pool money, form an LLC, and buy a property if they want a tennant in commons situation. They can take on the risk and do the work.
* Rent control privatizes the cost of a social problem (poor housing policy)
* Restrictive zoning and other barriers to building are why housing is expensive, this includes historic preservation and permitting too
* Parking minimums are a scourge
If your entire policy is some nimby reach around for single family home owners, I'm not sure anything I say will help you. I literally want to use my money to build more housing. I would also love to unwind all the distortions that currently exist (rent control).
If TiC collectives were a good solution we would see them more in the market. Your solution is just to ruin a market to make it work the way you want, but honestly, people are broke and cannot afford to buy. That also creates so many weird externalities that you seem to be unwilling to discuss.
Goodluck creating a single family home parking lot filled hellscape. I'll be adding units to the market (reducing rents) while you are complaining in la la land.
Low interest rates, zoning laws limiting supply, a shift into urban centers. It's really a perfect storm that pushed housing prices up and just encourage people to speculate. It could have been avoided. More housing could have been built. Government incentives to "get people owning their own homes" could have been better structured to avoid just goosing prices.
People treat houses like investments because, well, they produce returns like investments. If they didn't, people wouldn't look at them that way. You can't blame people for responding to incentives.
The best way to get people to stop buying houses houses as investments is to make them less attractive investments. Everything else will fail. Higher taxes, vacancy taxes, foreigner taxes - it all just encourages fraud, gaming the system, bending the rules. Take a look at Singapore's mess of public housing with built in profits. Every year they roll out some new rule to try and stay on top of it and every year Singaporean's get around the rule because it's just too lucrative not to.
But if you've been around long enough you'll realize it's a problem that will solve itself. Markets correct. People will move where houses are cheaper. Interest rates eventually rise. New houses will get built. New cities will become "desirable" and some old ones won't.
I remember back in 2008 when houses went from "you're a sucker if you don't buy now" to "I'm never owning a house again". It flipped like a light switch when suddenly the gravy train halted. Condo developers in Miami were selling units for $30k and had no buyers.
All this talk of "houses are being treated like a commodity" is just an observation, at a single point of time, at the top of the boom bust cycle. If you take a step back, you realize it's just a blip in time.
It reminds me of the quote from the movie Margin Call: "And it's certainly no different today than its ever been. 1637, 1797, 1819, 37, 57, 84, 1901, 07, 29, 1937, 1974, 1987-Jesus, didn't that fuck up me up good-92, 97, 2000 and whatever we want to call this. It's all just the same thing over and over; we can't help ourselves. And you and I can't control it, or stop it, or even slow it. Or even ever-so-slightly alter it. We just react. And we make a lot money if we get it right. And we get left by the side of the side of the road if we get it wrong. And there have always been and there always will be the same percentage of winners and losers. Happy foxes and sad sacks. Fat cats and starving dogs in this world. Yeah, there may be more of us today than there's ever been. But the percentages-they stay exactly the same."