> It is impossible for housing to be simultaneously a good investment and affordable.
This is one of those meme-phrases that no longer really means anything.
> Policymakers simply have to decide if they cater to those that already own homes, or those desperately wanting to buy one.
What exactly would you propose this means?
A house is always going to appreciate over the long haul on average, simply due to inflation. Are you proposing policymakers should decide to make inflation go away? (If it were so simple to accomplish that!)
> This is one of those meme-phrases that no longer really means anything.
It means exactly what it says it means. You can either making residential housing something that regular people earning regular salaries can afford to purchase, or you make it a vehicle for investment to grow money, so that rich people, and companies and brokerages and all the rest want to park their money there so that it will grow rapidly.
> What exactly would you propose this means?
Policymakers could decide to implement laws to limit how much of an "investment" housing can be. Obvious choices are limiting houses to only be owned by humans, limiting how many each human can have and penalties (tax or otherwise) for trying to "make money" from owning residential housing.
> A house is always going to appreciate over the long haul on average, simply due to inflation.
Residential property appreciates WAY faster than inflation. Since covid most Canadian houses are up at least 50%.
> Policymakers could decide to implement laws to limit how much of an "investment" housing can be.
How, exactly?
> Obvious choices are limiting houses to only be owned by humans, limiting how many each human can have
These are great and I fully support such rules. They will not make houses depreciate though. They'll make more of them owned by regular people instead of rental conglomerates, which is a wonderful outcome. But it won't make them depreciate.
> penalties (tax or otherwise) for trying to "make money" from owning residential housing
You make money from owning housing merely by owning and living in it. How are you looking to punish homeowners?
> These are great and I fully support such rules. They will not make houses depreciate though. They'll make more of them owned by regular people instead of rental conglomerates, which is a wonderful outcome. But it won't make them depreciate.
So there are cities in the US where 40% of all residential properties are owned by investment firms. Now they can't own them. So they sell them. Now you have a LOT of residential properties on the market, and a lot less entities that are legally allowed to purchase them than before. Of course prices will come down.
> Now they can't own them. So they sell them. Now you have a LOT of residential properties on the market, and a lot less entities that are legally allowed to purchase them than before. Of course prices will come down.
It's an interesting thought experiment, I'm not sure what the outcome would be.
In the real world we also have a lot of people who want to rent, so someone else needs to own those rental properties. But for the sake of a thought experiment, let's ignore that part.
There's a town with 1000 houses and 1000 families. 500 families own their house, the other 500 are owned by MegaCorp who rents them to the remaining 500 families (who'd prefer to buy but can't).
If MegaCorp is ordered to sell all their 500 houses overnight, I agree prices will drop. Because not every one of those 500 renting families will be ready to buy overnight, it means the ones who do can negotiate down on price. But that's not how divestitures are usually done, precisely due to this shock to the market.
If MegaCorp is ordered to sell one house per month until all are sold, I suspect prices go up a bit. Because even though the buyers know every house will eventually be sold, it's going to take 500 months so many would rather get in earlier so they'll be bidding against each other, rising prices in the early years of this program.
My main point is that "a lot less entities that are legally allowed to purchase them" is not that important. Because MegaCorp is a pass-through entity, they don't occupy a house, they just want the income stream from it. Ultimately it is still occupied by a family, whether by direct purchase or via renting. So removing MegaCorp from the picture does not reduce demand, there's still 1000 houses and a 1000 families. (It does remove their profiteering from renting, so that part is still a win.)
Of course, reality is more complex since there are renters who want to rent as well as families moving both into and away from this town, so modeling this precisely is too much work for a HN comment.
This is one of those meme-phrases that no longer really means anything.
> Policymakers simply have to decide if they cater to those that already own homes, or those desperately wanting to buy one.
What exactly would you propose this means?
A house is always going to appreciate over the long haul on average, simply due to inflation. Are you proposing policymakers should decide to make inflation go away? (If it were so simple to accomplish that!)