#BLMers now demanding that white people give up our homes!

[Harry Bosch]

I don't think it's bad idea, actually, and yes, the sort of thing you are suggesting for the housing sector could equally be applied to the employment and business/finance sector. I might not go as far as you with it, or come at it from where you're coming from*, but I think the general ideas have merit.

I would say that there are some advantages to not owning (either a home or a business) and that many don't want to, so I'm not sure if ownership specifically (or legislating it away) is the best goal. I'm more agreeing that profits, or if not those then the social benefits of those, should be shared a bit more equitably.



*I can see how the idea of legislating away the ability to own in perpituity is absolutely an appealing one to anyone who is in "fuck you, I haven't got mine" mode.

That's the thing though; I think that two things need to happen, ultimately, to make home ownership accessible, and I think one of those things is actually a capitalistic niche: a mechanism to leak ownership from entrenched parties, and home maintenance services.

If I pay a landlord ~1500 a month for no equity on a property with a 1000/month mortgage behind it, I should be able to pay < 500 a month on top of my 1000 a month mortgage to hire a property management service who will maintain my property. It would effectively be a form of insurance. It would be a form of insurance that would have to fill the gap between homeowners insurance and all the things home owners frequently need: tree removal, occasional landscaping services, HVAC replacement, plumbing maintenance, roof replacement, etc..

or society could fill this issue in a different way, perhaps, by essentially what amounts to building two general funds into real estate properties. One fund would be a repair fund, and the second an improvement fund. Ownership would come to mean vote control over the disposition of the elective improvement fund, and some more legally controlled authority over the maintenance fund (like SNAP restrictions). Once the funds are mature, (essentially, once the property itself is 'mature'), this could very easily then become a mechanism that pushes overage as a percent function to current owners, like a dividend. For fully owner occupied dwellings, this mechanism wouldn't be strictly necessary, though as an owner of my own home I wouldn't mind still having a strict mechanism to escrow those expenses.

Or, people could do one of either of these things. It is the difference between copay insurance and HSA, something we are all already legally required to pay for if it is not already provided for us through our employers (with partwise burdens, no less; ownership could be the needle which decides whether I am paying my money towards the landlord for rent + legally mandated ownership stake, or less rent because I am a % owner after some years and then towards maturing the property).

When it comes to burdens of ownership, this mostly resolves the heavy lifting that makes people "not want to own" when it comes to property.

When it comes to businesses, "not wanting to own" makes no sense, especially in a world where owners have no liability. It is pure equity. I have and never will have any financial burden, for instance, for the stock I am to receive as a function of my new position. It is, from my perspective, merely difficult-to-spend money. For most employees, nothing would change except that they would start to have an entitlement to dividends, and power IFF they chose to execute it. And at some point, the employees would have enough influence to decide who to place on the board.

The only reason to date, in fact, that I have not wanted to "own" business interest is because I utterly refuse to be one of those assholes out there taking value I did not work to produce. I will have to resolve how I dispose of my stock options at some point, and I have no idea how that will go, probably through selling those stocks back to the employees (or just giving a share randomly away to a current employee every time I collect dividends), so that I may be the change I wish to see in the world. I do have another person renting a room in my house, too, but I also charge well below market rate for them to live here, essentially buying away their equity share through foregone rent.

Eventually more of us "rabble" would get experience and exposure in that world, and we would bring what amounts to oversight to that universe which is currently immune to such.

This may be a more appropriate subject for JH's ridiculous socioeconomic equality thread. But it would certainly go a LONG way towards making a more equitable world and bleeding socioeconomic influence uniformly towards those currently without leverage without resorting to communism and eating the rich. I see this as the correction capitalism desperately needs.

There is a lot in your post to address! One of problems is that you don't understand the risk that owners take. First off, limited liability and other such legal definitions does not mean that an owner has "no liability"! Limited liability is a term that means that if you invest $100,000 to an LLC, your economic liability is limited to your investment. IOW, if your company stiffs a vendor, the vendor can go after your LLC and the funds that you invested into it, not your outside wealth. If you're an owner, and you break the law, you are subject to the law just like everyone else. If you don't understand this fundamental principal, you'd better not go into ownership! But there are the other issues to being an owner: losing value due to recession, illiquidity, having to meet bank/investor covenants, acts of god, and etc. You only focus on the good parts of ownership, which isn't realistic.

 

[Don2 (Don1 Revised)]

I don't think it's bad idea, actually, and yes, the sort of thing you are suggesting for the housing sector could equally be applied to the employment and business/finance sector. I might not go as far as you with it, or come at it from where you're coming from*, but I think the general ideas have merit.

I would say that there are some advantages to not owning (either a home or a business) and that many don't want to, so I'm not sure if ownership specifically (or legislating it away) is the best goal. I'm more agreeing that profits, or if not those then the social benefits of those, should be shared a bit more equitably.



*I can see how the idea of legislating away the ability to own in perpituity is absolutely an appealing one to anyone who is in "fuck you, I haven't got mine" mode.

That's the thing though; I think that two things need to happen, ultimately, to make home ownership accessible, and I think one of those things is actually a capitalistic niche: a mechanism to leak ownership from entrenched parties, and home maintenance services.

If I pay a landlord ~1500 a month for no equity on a property with a 1000/month mortgage behind it, I should be able to pay < 500 a month on top of my 1000 a month mortgage to hire a property management service who will maintain my property. It would effectively be a form of insurance. It would be a form of insurance that would have to fill the gap between homeowners insurance and all the things home owners frequently need: tree removal, occasional landscaping services, HVAC replacement, plumbing maintenance, roof replacement, etc..

or society could fill this issue in a different way, perhaps, by essentially what amounts to building two general funds into real estate properties. One fund would be a repair fund, and the second an improvement fund. Ownership would come to mean vote control over the disposition of the elective improvement fund, and some more legally controlled authority over the maintenance fund (like SNAP restrictions). Once the funds are mature, (essentially, once the property itself is 'mature'), this could very easily then become a mechanism that pushes overage as a percent function to current owners, like a dividend. For fully owner occupied dwellings, this mechanism wouldn't be strictly necessary, though as an owner of my own home I wouldn't mind still having a strict mechanism to escrow those expenses.

Or, people could do one of either of these things. It is the difference between copay insurance and HSA, something we are all already legally required to pay for if it is not already provided for us through our employers (with partwise burdens, no less; ownership could be the needle which decides whether I am paying my money towards the landlord for rent + legally mandated ownership stake, or less rent because I am a % owner after some years and then towards maturing the property).

When it comes to burdens of ownership, this mostly resolves the heavy lifting that makes people "not want to own" when it comes to property.

When it comes to businesses, "not wanting to own" makes no sense, especially in a world where owners have no liability. It is pure equity. I have and never will have any financial burden, for instance, for the stock I am to receive as a function of my new position. It is, from my perspective, merely difficult-to-spend money. For most employees, nothing would change except that they would start to have an entitlement to dividends, and power IFF they chose to execute it. And at some point, the employees would have enough influence to decide who to place on the board.

The only reason to date, in fact, that I have not wanted to "own" business interest is because I utterly refuse to be one of those assholes out there taking value I did not work to produce. I will have to resolve how I dispose of my stock options at some point, and I have no idea how that will go, probably through selling those stocks back to the employees (or just giving a share randomly away to a current employee every time I collect dividends), so that I may be the change I wish to see in the world. I do have another person renting a room in my house, too, but I also charge well below market rate for them to live here, essentially buying away their equity share through foregone rent.

Eventually more of us "rabble" would get experience and exposure in that world, and we would bring what amounts to oversight to that universe which is currently immune to such.

This may be a more appropriate subject for JH's ridiculous socioeconomic equality thread. But it would certainly go a LONG way towards making a more equitable world and bleeding socioeconomic influence uniformly towards those currently without leverage without resorting to communism and eating the rich. I see this as the correction capitalism desperately needs.

There is a lot in your post to address! One of problems is that you don't understand the risk that owners take. First off, limited liability and other such legal definitions does not mean that an owner has "no liability"! Limited liability is a term that means that if you invest $100,000 to an LLC, your economic liability is limited to your investment. IOW, if your company stiffs a vendor, the vendor can go after your LLC and the funds that you invested into it, not your outside wealth. If you're an owner, and you break the law, you are subject to the law just like everyone else. If you don't understand this fundamental principal, you'd better not go into ownership! But there are the other issues to being an owner: losing value due to recession, illiquidity, having to meet bank/investor covenants, acts of god, and etc. You only focus on the good parts of ownership, which isn't realistic.

Let's suppose Pete is a billionaire. Pete invests said $100,000 in a LLC. He then uses that LLC to rip off customers $10 million. Are you saying that he is only liable $100,000? And this is fair? Suppose hypothetically I am complaining about it.

Am I allowed to say the company has liability but Pete does not because his money has been transferred?

Here is the actual definition of liability: "the state of being responsible for something, especially by law." The corporate entity is responsible and not Pete, right? Therefore, it is correct to say he has equity but not liability, no? He can experience gains and losses as compared to his current stake and the company is liable for its financial risks. No?

If we're talking legal liability for criminal behavior, then executives may be liable and those executives might not be the owners...but I think we're talking financial liability.

 

[Harry Bosch]

There is a lot in your post to address! One of problems is that you don't understand the risk that owners take. First off, limited liability and other such legal definitions does not mean that an owner has "no liability"! Limited liability is a term that means that if you invest $100,000 to an LLC, your economic liability is limited to your investment. IOW, if your company stiffs a vendor, the vendor can go after your LLC and the funds that you invested into it, not your outside wealth. If you're an owner, and you break the law, you are subject to the law just like everyone else. If you don't understand this fundamental principal, you'd better not go into ownership! But there are the other issues to being an owner: losing value due to recession, illiquidity, having to meet bank/investor covenants, acts of god, and etc. You only focus on the good parts of ownership, which isn't realistic.

Let's suppose Pete is a billionaire. Pete invests said $100,000 in a LLC. He then uses that LLC to rip off customers $10 million. Are you saying that he is only liable $100,000? And this is fair? Suppose hypothetically I am complaining about it.

Am I allowed to say the company has liability but Pete does not because his money has been transferred?

Here is the actual definition of liability: "the state of being responsible for something, especially by law." The corporate entity is responsible and not Pete, right? Therefore, it is correct to say he has equity but not liability, no? He can experience gains and losses as compared to his current stake and the company is liable for its financial risks. No?

If we're talking legal liability for criminal behavior, then executives may be liable and those executives might not be the owners...but I think we're talking financial liability.

Pete is not covered if he is breaks the law. Secondly, If a customer loses $10 million to a company with a worth of $100,000, they deserve to lose their money. This happens every single day. I have a customer who may be declaring chapt 13 who owes me $20,000. I usually require a personal guaranty from an officer at that sales amount to an unknown company, but I didn't do it. That will hurt me. But the company is obviously having problems, and doesn't have cash. I don't have the legal right to go after his investors in the company.

But yea, I would agree with your definition above. Although I'm not an attorney. I take legal issues extremely serious. My only point with Jarhyn is that he is sorely mistaken if he thinks that being in a company will shield him from breaking the law.

 

[ruby sparks]

I think a few questionable assumptions are being made by some:

1. We are talking about big/corporate businesses (and leaving out small and medium, of which there are a huge number).
2. We are talking about a similarly large scale of landlord activity (and leaving out ditto).
3. We are talking about people who already had or have wealth to start with (many don't, including the writer of this post).
4. The risks and hard work involved are being minimised.

Now I'm in the small (actually very small) category (I'm a sole trader in my own business and have 2 rental properties on the side that I hope will either give me a modest pension or that I can give to my 2 daughters, one to each) and it would be oh-so-easy for me to claim special status and say the bigger guys should take hits that I don't have to, but I'm not even sure about that. Any familiarity I have with medium-sized operations (albeit I have very little familiarity with the big operations) is that that they are not necessarily what I would call exploiting workers (or tenants) parasitically (and in any case I'm probably doing it when I buy a tech or other product produced overseas in dubious circumstances, so I'm in a glass house where I shouldn't throw stones).

For me personally, where the line is crossed into exploitation, I'm not exactly sure. Somewhere, definitely.

And just to get back to the OP, I would say that asking people to give up their homes is more than a bit much, unless there's been chicanery involved on their part.

That said, the political gain, in the form of publicity etc, in openly demanding it, may well have some value for the complainers/protesters, as unreasonable tactics often do. Which I guess is why they do it. At the very least, questions should be asked about the structural parameters that result in some demographics gaining and some losing out, to see if there are any unfair advantages or disadvantages involved, possibly as a result of the legacy of unfair discrimination, or even current discrimination, if that is involved. It was, to some extent, in the subprime home loans crisis that peaked in 2007, so I wouldn't rule it out now.

 

[Loren Pechtel]

If I pay a landlord ~1500 a month for no equity on a property with a 1000/month mortgage behind it, I should be able to pay < 500 a month on top of my 1000 a month mortgage to hire a property management service who will maintain my property. It would effectively be a form of insurance. It would be a form of insurance that would have to fill the gap between homeowners insurance and all the things home owners frequently need: tree removal, occasional landscaping services, HVAC replacement, plumbing maintenance, roof replacement, etc..

This neglects the down payment and other costs. I just looked up houses for rent here, took the very first on the list as a sample.

Rent: $1,500/mo. 80/20 mortgage: $1,017/mo. I'm not seeing the property tax and the assessor's office apparently just rearranged their website, I can't even find the formula so I'm going to ballpark it based on our house--it's going to be a bit under $2000/yr. That's another maybe $160/mo. Insurance costs are even harder to figure but it appears to be a bit less than the property tax for owner-occupied, I know it's higher for rental property but I don't know how much.

Oops, your $500/mo is now less than half of that and I didn't even consider the cost of the down payment. The owners aren't making out like bandits like you think! Counting the cost of the down payment I would say they are probably going to be losing money on this and are hoping to recoup it down the road when they sell. (They just bought the place and it's on the rental market--this was an investment, not someone forced to move and renting out their old place.)

Note that in addition to abrupt failures there will be maintenance items that aren't so abrupt. Walls occasionally need paint. Flooring doesn't last forever. Trying to handle this sort of thing with an insurance model would be very difficult.

 

[ruby sparks]

... I would say they are probably going to be losing money on this and are hoping to recoup it down the road when they sell.

This is normal as far as I can tell. If they keep it long enough, and rents rise, even moderately, they can break even on a monthly basis in the medium term, and may even be running a profit towards the end.

People who don't have to borrow a mortgage are obviously in a better position. Sometimes these are landlords who've being doing it for decades and they're ploughing previously-earned profits back in. It's something I sometimes wish I'd done. I started to do it, about 25 years ago, bought two and then chickened out of going any further (gearing up as it's called) because of the growing exposure to risk. Did pretty good on the two though when selling after about 15 years. Belatedly doing same again now, but impending economic forecast is not as friendly this time.

I think you're quoting a repayment mortgage there, which is the best way to go, if you can stand the loss on a monthly basis (and I don't think you've included all the monthly costs, or at least not the ones that would be incurred here), because then at the end the mortgage is paid off, so the sale price is all yours, minus capital gains tax on any increase in value (@ approx 23%). If you can't afford the monthly loss, you go interest-only (a LOT cheaper per month) and then the original mortgage has to be deducted from the eventual sale (but you still pay the same capital gains tax, so that's still a deduction).

Note that in addition to abrupt failures there will be maintenance items that aren't so abrupt. Walls occasionally need paint. Flooring doesn't last forever. Trying to handle this sort of thing with an insurance model would be very difficult.

Landlord's insurance won't generally pay out for such things. And for electrical appliances, they'll ask for receipts, and if it's past a certain age (when wear and tear are expected).....often won't be covered.

 

[James Madison]

What “expense” do you mean? The “expense” they can no longer own that plot of land and the house on the land? That there’s one less piece of land to own and build a house on?

Landlords would quit the field left and right and real estate prices would correct to sane values again.

Is that the cause for an insane level of real estate prices?

But seriously, why does anyone need one person (or few persons) to own all the real estate in the first place?

Your notion of “need” and your notion of whether someone, anyone, has a “need” is the basis for making these determinations? Sounds a bit like a controlled state, where people’s need for real estate, and how much of it, is determined by some entity other than the individual.

It fits the sentiment of some today, and in this thread. By some’s personal se sensibilities, John makes too much money in relation James. By some’s sensibilities, James makes too little money in relation to John. Somehow, my some esoteric metric apparently, the amount of money the CEO of McDonald’s makes is too much in relation to the person who labors to pull the frozen patties out of storage, thaw them, and flip them, then throw em in a bun. You, my some means, insinuate generally, owning more than one home is too much, says you.


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Yes, some people's needs for certain things ought very much be regulated and controlled by some party because SOME PEOPLE ARE FUCKING HOARDERS, and sometimes THEY HOARD LIMITED RESOURCES.

In the face of a fixed resource, it is absolutely the purview of the social contract to determine how much of that resource any one person can possibly be entitled to, which often is not much.

The rest of your post is full of bullshit Straw Manning. Money, unlike real estate, is not a fixed quantity.

Now whether any one person's individual contributions justify six orders of magnitude more of the margins more than the contributions of others, that's a whole different discussion; I think the adjustments to ownership could easily accomplish a correction there, too. If every stock dividend or transfer resulted in a margin of share being returned to the workers, people would both be able to own stock and get a return on investment, while being unable to hold the marginal value of the work of the workers in perpituity. Investors would get their pound of flesh, but workers would come to own the company.

The idea of legislating away the ability to own in perpituity is absolutely an appealing one to anyone who isn't already in "fuck you, I've got mine" mode.

What “expense” do you mean? The “expense” they can no longer own that plot of land and the house on the land? That there’s one less piece of land to own and build a house on?

Landlords would quit the field left and right and real estate prices would correct to sane values again.

Is that the cause for an insane level of real estate prices?

But seriously, why does anyone need one person (or few persons) to own all the real estate in the first place?

Your notion of “need” and your notion of whether someone, anyone, has a “need” is the basis for making these determinations? Sounds a bit like a controlled state, where people’s need for real estate, and how much of it, is determined by some entity other than the individual.

It fits the sentiment of some today, and in this thread. By some’s personal se sensibilities, John makes too much money in relation James. By some’s sensibilities, James makes too little money in relation to John. Somehow, my some esoteric metric apparently, the amount of money the CEO of McDonald’s makes is too much in relation to the person who labors to pull the frozen patties out of storage, thaw them, and flip them, then throw em in a bun. You, my some means, insinuate generally, owning more than one home is too much, says you.


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Now whether any one person's individual contributions justify six orders of magnitude more of the margins more than the contributions of others, that's a whole different discussion; I think the adjustments to ownership could easily accomplish a correction there, too. If every stock dividend or transfer resulted in a margin of share being returned to the workers, people would both be able to own stock and get a return on investment, while being unable to hold the marginal value of the work of the workers in perpituity. Investors would get their pound of flesh, but workers would come to own the company.

Yes, some people's needs for certain things ought very much be regulated and controlled by some party because SOME PEOPLE ARE FUCKING HOARDERS, and sometimes THEY HOARD LIMITED RESOURCES.

“Ought” to? “Ought” to according to whom? What? You? Because you say so? Are you making an ehrici appeal? A moral appeal? Whose morality? Are you a realist? Relativist? Cognivist? Tell me.

The rest of your post is full of bullshit Straw Manning. Money, unlike real estate, is not a fixed quantity.

Excuse me? I said it “fits” a kind of sentiment, a sentiment of some people telling other people they have too much of something. In this thread other posters have stated some people have too much of something. Some have said too much income in relation to some other person. Well, for you it is some people have too much of something, specifically, they have more than one home.

How do you determine two homes or more is too much? In part, so far, based on what you personally think “ought” to be done. People “ought” not own more than one home. Why? Because, in part, you said!

Now the other reason is, as far as I can tell, the notion not so much homes are a fixed resource, we could build more, but real estate, land upon which homes are built, is a “fixed resource.” Maybe you are referring to homes as a “fixed resource” as well? Maybe both? The exchange occurs over your assertion someone owning two homes is at another’s “expense” and suggest, in your question, there isn’t a “need” for two. Maybe I’ll address both, the home and real estate subject matter.

As you state below:

In the face of a fixed resource, it is absolutely the purview of the social contract to determine how much of that resource any one person can possibly be entitled to, which often is not much.

It is but a truism, I suppose, land is a “fixed resource” on earth. There’s only so much of it in existence on earth. But this truism doesn’t inform me of the necessity of a social contract to “determine how much of that resource anyone person can possibly be entitled to, which often is not much.”

Your reasoning hints at scarcity but the premise of “fixed resource” doesn’t, by itself, lead to scarcity. Are there not enough remaining homes or land? Is it true someone buying a second home today leaves no homes, land, or real estate for anyone tomorrow? Or the day after? Or the day after?

And does a “social contract” necessarily “determine how much of that resource any one person can possibly be entitled to, which often is not much”? There are other kinds of social contracts. There are social contracts that allow for, generally, the acquisition of land, resources, property, real estate, real property, by selling and buying, without some entity saying they’ve acquired too much (I leave the concept of monopolies to the side for a different discussion, as Standard Oil, if it was a monopoly, is different than our discussion of some people owning two homes and the basis of your derision towards such behavior). The “social contract” in the U.S. is, to varying degrees, based what I described. Why transition to yours? So, why follow your notion of social contract? I know you have a personal vision of what life “ought” to look like but you’re a dime a dozen.

which often is not much

How is that determined? Some “Oceania” government worker dictating to the rest of society how “much” is allowed?

The idea of legislating away the ability to own in perpituity is absolutely an appealing one to anyone who isn't already in "fuck you, I've got mine" mode.

Your view is so ineluctable that no one else could possibly dissent except for the group you’ve identified above? The world is divided into two groups, those who apparently find your logic inescapable, and those who are in “fuck you, I’ve got mine mode.” There’s no other category in which people could fall into who also disagree with you?


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[Loren Pechtel]

People who don't have to borrow a mortgage are obviously in a better position. Sometimes these are landlords who've being doing it for decades and they're ploughing previously-earned profits back in. It's something I sometimes wish I'd done. I started to do it, about 25 years ago, bought two and then chickened out of going any further (gearing up as it's called) because of the growing exposure to risk. Did pretty good on the two though when selling after about 15 years. Belatedly doing same again now, but impending economic forecast is not as friendly this time.

Actually, no--if you don't have a mortgage you get screwed on taxes. The rent shows up as ordinary income rather than capital gains if you make your money when you sell.

I think you're quoting a repayment mortgage there, which is the best way to go, if you can stand the loss on a monthly basis (and I don't think you've included all the monthly costs, or at least not the ones that would be incurred here), because then at the end the mortgage is paid off, so the sale price is all yours, minus capital gains tax on any increase in value (@ approx 23%). If you can't afford the monthly loss, you go interest-only (a LOT cheaper per month) and then the original mortgage has to be deducted from the eventual sale (but you still pay the same capital gains tax, so that's still a deduction).

Yeah, I just looked up a standard 80/20 mortgage. I have no way to see what the actual situation is. I wasn't even trying to find every last penny of costs, just trying to show that his notion of putting the extra towards a maintenance plan isn't viable because the extra isn't there in the first place.

Note that in addition to abrupt failures there will be maintenance items that aren't so abrupt. Walls occasionally need paint. Flooring doesn't last forever. Trying to handle this sort of thing with an insurance model would be very difficult.

Landlord's insurance won't generally pay out for such things. And for electrical appliances, they'll ask for receipts, and if it's past a certain age (when wear and tear are expected).....often won't be covered.

He's advocating an insurance model that covers normal things going wrong with the house as a way to make ownership more affordable. I was showing his model was far from reality.

 

[ruby sparks]

Actually, no--if you don't have a mortgage you get screwed on taxes. The rent shows up as ordinary income rather than capital gains if you make your money when you sell.

I'm not exactly sure what situation you're describing, and the taxes here may be different, but yes the rent is taxable income and the capital gains tax is basically on the increase in value (if there is a gain in value, otherwise it's a capital gains loss that can be set against other taxes).

Otherwise I agree with you. And being a landlord is not quite the picnic that some think.

But in general terms, there any many young people who have decent jobs and who work hard but who can't afford even a small starter home (possibly Jarhyn is one of them, I don't know) and I think the housing market has gone a bit askew when that becomes the case.

Here there is another initiative designed to address this. It's a partner initiative to the shared ownership (Co-Ownership) program I mentioned previously. Developers are often asked, as a condition of getting Planning Permission, to build a percentage of what are called 'Affordable Homes', but unfortunately this system is not working very well, as I understand it, and very few get built. The loophole that the developers use is that it is, in reality, given their sums, unaffordable for them, so what happens is they agree on paper to get the Planning Permission and then often later renege on the affordable homes. So when the next site comes up for sale, developers bid against each other for it on the basis of being able to renege, whereas if they could not renege, the price bid and paid for the site should come down, and then the affordable housing component could be afforded. So the rules, which I think are meant to be a brake on land prices, are not working as intended in many cases, because of loopholes. In other cases, for example when a public authority is selling the land, I think it can be made to work, because the stipulations are stricter (and thus developers do not outbid). Even then, affordable is not that affordable.

Shared Ownership and Affordable Homes Programme 2016 to 2021: guidance
https://www.gov.uk/government/colle...ordable-homes-programme-2016-to-2021-guidance

Note that it involves government grants to developers, as an incentive. Perhaps it is working better than I suggested. I'm not sure. I just hear things in the industry press and the media generally about it being circumvented.

Are there any initiatives in the USA along these lines?

 

[J842P]

Actually, no--if you don't have a mortgage you get screwed on taxes. The rent shows up as ordinary income rather than capital gains if you make your money when you sell.

I'm not exactly sure what situation you're describing, and the taxes here may be different, but yes the rent is taxable income and the capital gains tax is basically on the increase in value (if there is a gain in value, otherwise it's a capital gains loss that can be set against other taxes).

Otherwise I agree with you.

In general terms, there any many young people who have decent jobs and who work hard but who can't afford even a small starter home (possibly Jarhyn is one of them, I don't know) and I think the housing market has gone a bit askew when that becomes the case.

Here there is another initiative designed to address this. It's a partner initiative to the shared ownership (Co-Ownership) program I mentioned previously. Developers are often asked, as a condition of getting Planning Permission, to build a percentage of what are called 'Affordable Homes', but unfortunately this system is not working very well, as I understand it, and very few get built. The loophole that the developers use is that it is, in reality, given their sums, unaffordable for them, so what happens is they agree on paper to get the Planning Permission and then often renege on the affordable homes. So when the next site comes up for sale, developers bid against each other for it on the basis of being able to renege, whereas if they could not renege, the price bid and paid for the site should come down, and then the affordable housing component could be afforded. So the rules, which I think are meant to be a brake on land prices, are not working as intended in many cases, because of loopholes. In other cases, for example when a public authority is selling the land, I think it can be made to work, because the stipulations are stricter (and thus developers do not outbid). Even then, affordable is not that affordable.

Shared Ownership and Affordable Homes Programme 2016 to 2021: guidance
https://www.gov.uk/government/colle...ordable-homes-programme-2016-to-2021-guidance

Note that it involves government grants to developers.

Where I live, even if you are making 100k dollars a year, you really can't afford a home (median home price in San Francisco is $1.5 million). Of course, there are many salaries that pay a lot more than that for tech workers.


My rent for a 450 square foot studio was $2600 last year, although I negotiated it down to $2100 since covid and the renter market "collapse". I actually could have gotten more if I negotiated harder, I think.

 

[ruby sparks]

Actually, no--if you don't have a mortgage you get screwed on taxes. The rent shows up as ordinary income rather than capital gains if you make your money when you sell.

I'm not exactly sure what situation you're describing, and the taxes here may be different, but yes the rent is taxable income and the capital gains tax is basically on the increase in value (if there is a gain in value, otherwise it's a capital gains loss that can be set against other taxes).

Otherwise I agree with you.

In general terms, there any many young people who have decent jobs and who work hard but who can't afford even a small starter home (possibly Jarhyn is one of them, I don't know) and I think the housing market has gone a bit askew when that becomes the case.

Here there is another initiative designed to address this. It's a partner initiative to the shared ownership (Co-Ownership) program I mentioned previously. Developers are often asked, as a condition of getting Planning Permission, to build a percentage of what are called 'Affordable Homes', but unfortunately this system is not working very well, as I understand it, and very few get built. The loophole that the developers use is that it is, in reality, given their sums, unaffordable for them, so what happens is they agree on paper to get the Planning Permission and then often renege on the affordable homes. So when the next site comes up for sale, developers bid against each other for it on the basis of being able to renege, whereas if they could not renege, the price bid and paid for the site should come down, and then the affordable housing component could be afforded. So the rules, which I think are meant to be a brake on land prices, are not working as intended in many cases, because of loopholes. In other cases, for example when a public authority is selling the land, I think it can be made to work, because the stipulations are stricter (and thus developers do not outbid). Even then, affordable is not that affordable.

Shared Ownership and Affordable Homes Programme 2016 to 2021: guidance
https://www.gov.uk/government/colle...ordable-homes-programme-2016-to-2021-guidance

Note that it involves government grants to developers.

Where I live, even if you are making 100k dollars a year, you really can't afford a home (median home price in San Francisco is $1.5 million). Of course, there are many salaries that pay a lot more than that for tech workers.


My rent for a 450 square foot studio was $2600 last year, although I negotiated it down to $2100 since covid and the renter market "collapse". I actually could have gotten more if I negotiated harder, I think.

Gosh. I think London has similar issues, though I doubt the median house price is anywhere near that.

Here in NI the average house price is £144k, rising to £159k in Belfast.

ETA: London average is £655k

 

[J842P]

Gosh. I think London has similar issues, though I doubt the median house price is anywhere near that.

Here in NI the average house price is £144k, rising to £159k in Belfast.

Sorry, I just looked it up again, it's only 1.3 million.

 

[ruby sparks]

Gosh. I think London has similar issues, though I doubt the median house price is anywhere near that.

Here in NI the average house price is £144k, rising to £159k in Belfast.

Sorry, I just looked it up again, it's only 1.3 million.

Ok I think that's about £1 million. London is two thirds of that. Belfast is only an eighth of that. Dublin about a quarter.

Earning $100k and not being able to afford to buy even a small starter property seems way out of kilter.

 

[Emily Lake]

This thread took an interesting philosophical turn...

 

[Loren Pechtel]

Actually, no--if you don't have a mortgage you get screwed on taxes. The rent shows up as ordinary income rather than capital gains if you make your money when you sell.

I'm not exactly sure what situation you're describing, and the taxes here may be different, but yes the rent is taxable income and the capital gains tax is basically on the increase in value (if there is a gain in value, otherwise it's a capital gains loss that can be set against other taxes).

In the US capital gains are treated more favorably at tax time than ordinary income. (However, this actually comes pretty close to being balanced when you consider inflation. It's actually not a windfall for investors, but a screwing of lenders.) If you have a mortgage you deduct your mortgage payment from the rent you received in reporting income. This normally pretty much zeroes it out, your actual income shows up as capital gains when you sell. However, if you don't have a mortgage (or not enough of a mortgage) you end up with income every year and it's reported as regular income rather than capital gains.

But in general terms, there any many young people who have decent jobs and who work hard but who can't afford even a small starter home (possibly Jarhyn is one of them, I don't know) and I think the housing market has gone a bit askew when that becomes the case.

While I do think the market is somewhat askew you're not providing evidence of it. Almost anyone with a remotely decent job can afford a house--the issue is whether they can afford a house where they want to live. Sorry, but with larger cities the demand for land drives prices up. People live on smaller amounts of land and that means apartments or condos, not houses.

Here there is another initiative designed to address this. It's a partner initiative to the shared ownership (Co-Ownership) program I mentioned previously. Developers are often asked, as a condition of getting Planning Permission, to build a percentage of what are called 'Affordable Homes', but unfortunately this system is not working very well, as I understand it, and very few get built. The loophole that the developers use is that it is, in reality, given their sums, unaffordable for them, so what happens is they agree on paper to get the Planning Permission and then often later renege on the affordable homes. So when the next site comes up for sale, developers bid against each other for it on the basis of being able to renege, whereas if they could not renege, the price bid and paid for the site should come down, and then the affordable housing component could be afforded. So the rules, which I think are meant to be a brake on land prices, are not working as intended in many cases, because of loopholes. In other cases, for example when a public authority is selling the land, I think it can be made to work, because the stipulations are stricter (and thus developers do not outbid). Even then, affordable is not that affordable.

It's not just a matter of loopholes--mixing residence values drives down the value of the better residences. Thus it costs developers far more than simply the cost of the "affordable" housing to comply. And it's generally not possible in the first place--building codes very often do not permit the construction of something "affordable" simply due to land values. The developer can subsidize the "affordable" units--but that just provides a windfall to the first purchaser, it doesn't solve the problem.

 

[Loren Pechtel]

Gosh. I think London has similar issues, though I doubt the median house price is anywhere near that.

Here in NI the average house price is £144k, rising to £159k in Belfast.

Sorry, I just looked it up again, it's only 1.3 million.

Ok I think that's about £1 million. London is two thirds of that. Belfast is only an eighth of that. Dublin about a quarter.

Earning $100k and not being able to afford to buy even a small starter property seems way out of kilter.

It's one of the most expensive places in the US, house prices are dominated by high-skill tech workers. There's also the problem that the streets simply can't support too much of an increase in population density, apartments/condos aren't a good answer. It's constrained space and far from flat which also adds to the problem. This is admittedly the most extreme street there:

 

[Politesse]

Ok I think that's about £1 million. London is two thirds of that. Belfast is only an eighth of that. Dublin about a quarter.

Earning $100k and not being able to afford to buy even a small starter property seems way out of kilter.

It's one of the most expensive places in the US, house prices are dominated by high-skill tech workers. There's also the problem that the streets simply can't support too much of an increase in population density, apartments/condos aren't a good answer. It's constrained space and far from flat which also adds to the problem. This is admittedly the most extreme street there:

More true of some neighborhoods than others, there are plenty of places in the East and South Bay that could zone much denser if there weren't a hue and cry every time it is tried.

 

[Bomb#20]

Of course, if they come to own some percentage over time as a function of occupancy and paying rent, that would mean by your logic that they would take better care of the property. Everyone wins!

Hey, basic question about your leaky-equity proposal: let's suppose my tenant rents my spare house from me for however long your new ownership rules say she has to rent it from me in order for, say, 10% of the equity to leak from me to her. Now she's a 10% owner of the house. Is she allowed to sell her 10% stake?