Home Ownership Is The West’s Biggest Economic-Policy Mistake
 

Home Ownership Is The West’s Biggest Economic-Policy Mistake


January 16, 2020

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Read More: https://www.economist.com/leaders/20...policy-mistake




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Donald Trump was right

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The American dream still exists in smaller cities, at least here in Canada. The outer suburbs of Montréal are a bargain.

Identifying that there's a problem is the easy part since a big enough problem tends to be obvious to practically everyone. The hard part is correctly identifying the source of the problem and proposing appropriate solutions.

I guess that makes the 99% movement a decade before him downright prophetic

Home ownership was never interesting to me, even when others would make the case that it was. I plan to travel a lot and donate to a lot of causes. The least I would own would be a condo.

"Home ownership is too expensive! Let's give up on it and make it impossible!"

Screw the economist and this neoliberal garbage. I guess only the rich should be free of wasting money on rent and able to build family wealth?

And what is that exactly? In what sense would it work? What's the desired end game? By what metrics do our economic know-better overlords measure success? High interest rates and down payments so if you eat rice and beans daily maybe by age 50 you can buy a lovely flat, just like in Germany and much of Europe?

the desired end game is a sustainable, inclusive future.

land is finite. unrestricted ownership of it combined with restrictive zoning (to "protect" people's investments, of course!) forces unsustainable sprawl as population increases or patterns of settlement and economy shift. it's a fundamentally broken model. the people owning the property control the only means (density) by which the amount of it could be expanded to meet the needs of a growing society.

at some point residences went from "something you need to live like food, water, health care, clothing" to "generational piggy bank." the current system MIGHT make sense if there was a massive tax on inherited real estate.

The real solution is to make it illegal to own a home that you don't live in. One home per person maximum. Everybody wins except for landlords.

...and investors, and tenants, and families. My wife and I own her parents house, for a variety of reasons. Not sure why that should be disallowed.

I read that article and have no idea what they're talking about. The premise is wrong. Housing ownership has been a fantastic wealth-generating vehcile that distinguishes the Anglosphere from other developed nations. The UK is overall poorer than Germany but millions of UK households are much better off than their German counterparts due to homeownership. Germans traditionally rent, or if they own, inherit homes.

I can't read it because of the paywall but sounds like the premise is somewhat correct and the examples are wrong. NYC and SF have the lowest home ownership rates in the country, and the most consistently vibrant economies. Other parts of the country, particularly in the Rust Belt, have high rates of home ownership and economies that have struggled to renew for the information age.

^ The examples are spot on, they're saying housing is completely fucked in those cities and it is.

But it's not. Housing is more efficient in New York than it is in Detroit. People in New York don't pay more in taxes than their houses are worth because of upside down markets.

So, there would be zero rentals? EVERYONE WINS! :cheers:

k tell that to the thousands of New Yorker's who leave for states like NC so they can actually buy a house.

There is nothing efficient about obscenely unaffordable housing markets.

Nobody in Metro Detroit pays more taxes than what their home is worth and home ownership is attainable. Nice alternative facts though.

New York's housing market is obviously not unaffordable. Is it a market that is structured for +50% home ownership? No, it's not nor has it ever been. New York's market looks more like most of America did before the federal government implemented policies to expand home ownership.

This was one of the major factors of so many houses in Detroit becoming vacant over the past 15 years. Wayne County evicted thousands (maybe hundreds of thousands) of families because the tax assessments were ridiculous compared to the market value of the properties.

I don't think home ownership is a policy mistake, the mistake is that most our policies are structured and biased towards an assumption that most will be homeowners, while land use policy these typically works toward restricting housing development, at least in our most urban cities. I know the article blames homeownership itself for this lack of housing, but I don't think it's as dire as it makes it sound. The politics behind increasing housing is hard, but not impossible.

Homes were over-assessed but not more than what they're overall worth and there are many relief programs in place currently. Foreclosures have plummeted to barely any in Detroit now so this issue moving forward is fixed.

But this is all irrelevant since slow tax re-assessments, housing crash and foreclosures are not exclusive to da rUStbeLT (I think I recall Las Vegas having the worst foreclosure rate in the country) and have nothing to do with the current housing crisis. If you wanna talk efficiency there's who knows how many thousands of luxury units all over NYC that are sitting empty and the only purpose they serve is as a piggy bank all while many domestic New Yorker's leave for other states because the market is akin to a serfdom otherwise they're renting with 5 roommates in a shoebox. That's the opposite of efficient.

Your entire premise about efficiency is terrible if you're trying to argue that there's something more functional about renting for cities since the foreclosure crisis just increased the amount of renters.

The New Yorkers leaving for NC are mostly from areas where housing values or more or less the same..aka Upstate. They are getting away from a sluggish economy and high taxes not so much the prohibitive cost of home ownership seen in Downtstate.

You're talking about two different things. The subject is home ownership, not the cost of renting.