I think it’s valid to address issues with proposed solutions, especially prior to their implementation. For what it’s worth, their argument is not entirely sound, since most these proposals have built in subsidies for home buyers, but it’s good that they are providing their perspective.
The demand for housing isn’t being limited though. The demand for investment property has decreased to be replaced with demand for owned housing. You can still sell a new house. People are still buying houses. I agree with others that worse case, we can bolster development at the federal level, but that doesn’t seem like it will be necessary. Additionally, with declining birth rates and an increase in WFH jobs, less housing will be needed, and people are moving to areas where new construction is not as needed as they are moving into previously abandoned/vacant rural areas. So you won’t be seeing new housing developments there so much as rebuilding.
Your paradigm is in no way connected to the reality of how people are moving. New home construction is going up like crazy in the small cities and towns people move into. To expect a small area to absorb a 50% population increase with little new construction is just not realistic.
And to expect renting to just…end? That sounds like a crazy level of privileged bubble. A huge fraction of the population is not and never will be able to afford homeownership, and expecting the government to fund their home purchases would bankrupt any nation.
In my comment I explicitly stated that there is no need to stop new construction. I do not expect any area to absorb anything. I suggested construction will continue and “additionally” that some areas are being revitalized and will have different needs (rebuilding vs new homes). That’s just true.
I’m not expecting renting to just end. I know people who do not want to own any kind of property and prefer short term rentals. It’s not a sensible goal to force people into owning if they don’t want to.
What does it mean to not be able to afford home ownership? Do you mean they not have enough money for housing in the first place, or do you mean they can just rent? If option one, they are considered homeless and the state should provide housing, if option two, then yes, rent to own should be a real thing. First time home buyers loans exist and the project should be expanded. These are not novel proposals that I just made up. People have been suggesting them for quite a while.
Yeah but expanding those programs on the order you’re talking about is absurd levels of money. Not to mention the credit risks…unless you’re suggesting the government act as guarantee, in which case we’ll have a student loan scenario. Home prices will just rise to whatever they were before, plus the government grant.
it will literally earn the government money long term
it’s not like it’ll happen overnight
it’s not a grant it’s a loan. The loan would be for the entire amount. This is already basically in place in a different country.
prices would not skyrocket because there would be virtually no rental market so if you wanted to sell you’re selling to someone who is going to occupy. Homes will not be investments the way they are currently seen. This will be a way for people currently in a position to only rent to start getting equity so they can have better opportunities in the future. Selling to upgrade will be done because a) you started earning more b) because you had a period with no payments and therefore were able to save c) originally purchased below your means. There will be inflation, but generally no one will be moving into a home for 500k and selling 2-3 years later for a million. There won’t be enough buyers once investors are mostly disincentivized/removed from the market
Most governments do not, including the USA. Yes, they take in lots of taxes, but they spend even more. Governments frequently run at a deficit more often than not.
How
Irrelevant
A loan to people with shaky credit with no penalties for defaulting is effectively a grant. See: PPP loans.
None of this addresses the inflationary aspect of government money being pledged to support a purchase. If the government is promising to loan up to $500,000 then I know for sure I can sell it for $500,000. Why would I ever sell for $400,000? It creates a price floor.
So those who want to buy a house but can’t afford it are still fucked. Cool.
I think it’s valid to address issues with proposed solutions, especially prior to their implementation. For what it’s worth, their argument is not entirely sound, since most these proposals have built in subsidies for home buyers, but it’s good that they are providing their perspective.
Their “issue” is that they think it doesn’t benefit them personally, and they think everything ought to be about them.
When more homeless people are in public housing, there’s less demand for rentals.
When there’s less demand for rentals, competition falls and rents fall too.
When rents are low, landlording becomes less profitable.
When landlording isn’t profitable, investors move their stock to higher growth assets.
When investors sell their houses, the price to buy a house falls.
To put this in simple terms: a rising tide lifts all ships. Housing the homeless improves the lives of everyone except landlords and billionaires.
That’s great in the short term, but now no one is ever gonna build housing again, so in a generation we’re back to a housing shortage.
If you exclusively try to bring down housing costs by attempting to limit demand, you end up making the problem worse. You need to offer more supply.
The demand for housing isn’t being limited though. The demand for investment property has decreased to be replaced with demand for owned housing. You can still sell a new house. People are still buying houses. I agree with others that worse case, we can bolster development at the federal level, but that doesn’t seem like it will be necessary. Additionally, with declining birth rates and an increase in WFH jobs, less housing will be needed, and people are moving to areas where new construction is not as needed as they are moving into previously abandoned/vacant rural areas. So you won’t be seeing new housing developments there so much as rebuilding.
Your paradigm is in no way connected to the reality of how people are moving. New home construction is going up like crazy in the small cities and towns people move into. To expect a small area to absorb a 50% population increase with little new construction is just not realistic.
And to expect renting to just…end? That sounds like a crazy level of privileged bubble. A huge fraction of the population is not and never will be able to afford homeownership, and expecting the government to fund their home purchases would bankrupt any nation.
In my comment I explicitly stated that there is no need to stop new construction. I do not expect any area to absorb anything. I suggested construction will continue and “additionally” that some areas are being revitalized and will have different needs (rebuilding vs new homes). That’s just true.
I’m not expecting renting to just end. I know people who do not want to own any kind of property and prefer short term rentals. It’s not a sensible goal to force people into owning if they don’t want to.
What does it mean to not be able to afford home ownership? Do you mean they not have enough money for housing in the first place, or do you mean they can just rent? If option one, they are considered homeless and the state should provide housing, if option two, then yes, rent to own should be a real thing. First time home buyers loans exist and the project should be expanded. These are not novel proposals that I just made up. People have been suggesting them for quite a while.
Yeah but expanding those programs on the order you’re talking about is absurd levels of money. Not to mention the credit risks…unless you’re suggesting the government act as guarantee, in which case we’ll have a student loan scenario. Home prices will just rise to whatever they were before, plus the government grant.
Most governments do not, including the USA. Yes, they take in lots of taxes, but they spend even more. Governments frequently run at a deficit more often than not.
How
Irrelevant
A loan to people with shaky credit with no penalties for defaulting is effectively a grant. See: PPP loans.
None of this addresses the inflationary aspect of government money being pledged to support a purchase. If the government is promising to loan up to $500,000 then I know for sure I can sell it for $500,000. Why would I ever sell for $400,000? It creates a price floor.