Or so “they” say while “they” amass thousands of properties and massive fortunes while we get tagged, farmed in office buildings, monitored and ignored in politics.

/Sarcasm

Sorry, I am bitter about this because I simply dont buy in to this concept. Owning your own home is, in my view, the first step towards financial freedom.

Downvote away but i strongly believe this concept is horrible.

It primarily talks about the unfairness of the current system, the NIMBY problem reducing housing stock and the issue of regulations intended to curb new building reducing the stock of houses so that only the elite and existing homeowners can afford them.

The section on renting/alternatives is mainly just a discussion about alternatives to the current unfair approach and some cases where things work better.

That said the situation in most of the western world is insanity, If I want to buy a house in my hometown (Perth, Australia) I need a minimum 5% deposit + 3-5% stamp duty and the median house now costs 500k AUD.

Median salary is closer to 75k AUD, so you're looking at a mortgage of roughly 6 salary years and a deposit of at least 50k (if you have good credit and no debts).

Edit to add:

A 20% deposit is minimum to not have to pay a 'Mortgage insurance' which gets added to your mortgage to cover the bank if you default and is usually equivalent to the difference between your deposit and 20%.

Oh wow. I had to read the rest of your comment twice to understand that you were saying these seem high to you. They seemed really low to me. To put it into perspective, you need a 10-20% deposit in Belgium (depending on various factors) and there's a 6% tax for an old house (10% up until very recently) or 21% for a new house. It's basically impossible to buy a house if you're young or single or come from a poor family. I feel your pain.

A 20% deposit is minimum to not have to pay a 'Mortgage insurance' which gets added to your mortgage to cover the bank if you default.

Belgium sounds like an even more painful situation, sucks for those of us who would just like to have a stable place to live and be allowed to add some personal character to (not allowed in most rentals ive lived in)

This seems such a weird condition to add. Someone who doesn't earn much but saves up over 22 years for a house has to pay stamp duty on his first house, but someone privileged who can buy a house when 30 years old doesn't?

One of the major political parties here (Centre Party, the agrarian-liberal party) wants people to live outside of the cities. Finnish cities are so small that it's easy to commute from a place with plenty of cheap land and thus it's possible for most people to buy or build a house there if they want to.

Granted that Finland has a very different culture (disclaimer: I live in Sweden) and we aren't in the 50s anymore to invest heavily on a car-centric society but incentivising people to move away from city centres can have unpredictable consequences 20-50 years down the line.

In my country, if you're poor and if it's the first house you buy, you can ask a 0% tax loan from the government and use it to pay your stamp duty with it.

Correction: I double checked and it looks like it can be added to your mortgage, which isn't as bad up front.

Thanks!

One (of many) big issue(s) is that the past has seen unchecked claiming of land for new projects leading to an acute shortage of land, while lots of existing houses and buildings are entirely outdated.

We are talking about houses which are 60 or 70 years old typically located in densely pouplated urban agglomerations and haven't seen little to no remodeling whatsoever during that time. These are hardly isolated, difficult to heat, are entirely outdated in terms of utilities and plumbing and so on.

The idea behind the difference is to incentivize people to buy and renovate older, existing houses and curbing the further occupation / use of free & open space with new construction and urban sprawl.

It should be noted: Belgium is also a country with an incredibly complex fiscal system. There are taxes as well as tax breaks on every aspect of life. Belgium is a complex federal nation with many levels of government. To put that in perspective: it's a country with 6 different governments. All of which turn politics and policy making, unironically, into 5D chess. The fiscal system tends to be the arena where everything comes together, generally as a compromise which is often more founded on pragmatism then necessity.

Historically, home ownership has been, and still is, massively incentivized in Belgium. But just like everywhere else, soaring housing prices and an ageing population are causing issues for younger generations who can't buy property without financial help from their parents.

And so, young people find themselves in a bind. They can't just buy any property, market dynamics and public policies push them towards buying outdated property only to face long, drawn out and expensive renovation projects just to bring everything up to date with modern, strict construction codes.

I'm in a nearby country and this accurately describes my house. I gave up, we live in it, halfway renovated, crazy plumbing, mixed masonry, hairball electric panel, dangerous corners everywhere. Contractors are too expensive and the DIY spirit only goes so far when you're working parents.

Sorry if my first comment was a bit coy and unclear. Both ancestor comments are about Australia & Belgium. Google tells me that in Australia new properties are incentivized over old:

>Grant: First home buyers can access a $10,000 grant when purchasing or constructing a new home, regardless of how much the property is worth. Stamp duty concessions: The territory government provides an up to $18,601 Territory Home Owner Discount (THOD) on stamp duty costs for first-time buyers.

My Aussie friends tell me this changes frequently, that it also differs by state, but some sort of incentive to prefer new properties have been policy for a long time.

GP says that Belgium penalizes existing houses:

>a 6% tax for an old house (10% up until very recently)

So there aren't lower taxes on older properties in either country. You get a discount on the taxes only when you purchase a new property, which is an incentive in alignment with the interests of property developers.

The big problem in Australia is that nobody really in the government wants to do things to make houses more affordable. Anything that would immediately lower house prices would be a disaster for the political party and somewhat for the country. In fact the government has been doing all it can to keep house prices rising further and further.

First by adding a first-home-owners' grant, which just increased the prices of cheaper property, and most recently by allowing people to take money out of their retirement savings to buy a property. All this does is just add more fuel to the real estate market so prices would increase.

The only real way to lower prices would be for a genuine crash to happen, one where the government would be incapable of doing anything to prevent. The other would be to get rid of negative gearing, maybe just for existing property initially, so that people won't leverage up the eyeballs buying more and more investment properties.

I'm on a decent salary by Australian standards and am going to be waiting at least 2 more years before I can afford a 10% deposit (have been saving for several years already at a lower rate).

Just have to hope all the decent land/houses are still around by then and that the house prices dont outpace my savings.

Anyway. I just wanted to say that, and also, this issue is seemingly everywhere. I’ve been in Toronto Canada for over a decade now and prices have gone crazy for almost that entire time. When i arrived a house in the city was 350-400k, that same house today might fetch 1.6m, or if renovated I’ve seen them sell for as much as $3.8m

And now they’re building like crazy, with people leaving in droves. Hopefully that’ll depress prices long-term.

Consumer mortgage debt is directly correlated with housing prices in Canada. This plus constraints on permits for single family dwellings.

Drive around and have a look at some of the high end condo's at night - there are no lights on. Mostly dark.

The no capital gains and no inheritance tax loopholes in Canada will eventually be closed.

(https://www.worldometers.info/world-population/canada-popula...) percentage population growth 0.9% is very low based on historical standards.

Condo rents have absolutely tanked, by the way

Goddamn those are some crazy numbers, how does anyone even begin to afford that? You'd be saving for 20 years just for a deposit....

Somehow there was only a small dip in prices during the pandemic and now the property market is back on the boil again.

I honestly don't think any family without high dual incomes can actually afford a home now close to the city. The only places that are close to affordable for middle income families are far away from the centre.

I get that not everyone can do it, but it's a possibility for more sanity in house ownership for a groups. Unfortunately that also allows Melbourne market to not crash for longer...

So basically, as long as regional towns keep up with development and infrastructure, the overall result may not be a crash, but rather slow exodus from the cities. Now if only transport/trains would keep up with the times...

There are other ways of looking at it where you are correct.

It’ll balance out when our lifespans max out somewhere (perhaps never?), and productivity is improving with technology as well, likely helping the situation somewhat.

This is not the only factor however.

The solution to the "problem of home ownership" is to stop making areas undesirable places to live. Portland springs to mind but there's San Fran. NYC, L.A. but it's not just the Big Blue cities in the US and elsewhere, it's nations run by totalitarians everywhere.

The solution is to export prosperity around the world. Then we can all enjoy the benefits of the developed world's population crash which translates into cheaper housing, amongst other things, both good and bad.

Since The Economist is looking everywhere for the West's biggest mistake, today's their lucky day, I happen to have it right here.

The West should have demanded of China and every other non-democratic regime in the world, as a condition of receiving manufacturing and industries and the privilege of importing their products duty-free, that they liberalize their political systems in ways which are hard to reverse.

This had the power to transform regions from Mexico and Central America to China.

We could have created a schedule of increasingly substantive requirements composed of democratic institutions, free speech and political assembly, (truly) free markets and anti-corruption metrics which had to be met in order to benefit from trade with the West. But we didn't.

We didn't because a small group of industry beneficiaries made small and large fortunes by outsourcing the West's industrialization. They leveraged the lack of environmental and labor standards endured by the world's poor, living under corrupt and totalitarian regimes, to lower the cost of goods sold then sell back into the first world at first world prices.

That's what the elite have been doing since Clinton gave China MFN status and even before.

Now no one in the West can afford the most basic thing every mammal requires- a place of their own. A home. A burrow. A nest. A place to which they can retreat, which they can control and experience sheer animal comfort and safety. Now even that has to go to satiate the boundless greed of our elites.

The only thing left for them to come after is reproduction. We should probably also start thinking about turning our mates over to them, since they can provide for them better than we can.

Good macroeconomic policy (like international trade agreements) can be used to push back against this trend somewhat.

Indeed, well before.

https://en.wikipedia.org/wiki/Banana_republic

And usually, families try to buy about 1 plot of land for each child typically.

I think that, no matter where you are in the world, land is an important asset. A place to live, a house to cover your head, reduces a lot of stress in life.

In India, there are three things considered first and foremost in life "Roti, Kapda Makaan".

Roti - Food Kapda - Clothing Makaaan - House.

Loan tenures are about 25 years, so most families take a home and pay the loans during their active service life.

About 10 or 15 years down the line, one or two floors are added to tge house, for rental purpose. Here too, rental is less than half of construction cost. Again, intent is for very long term appreciation of the asset, rather than a passive income source.

As it turns out, this is not the case:

https://www.statista.com/statistics/187576/housing-units-occ...

FTSE100 appears to have doubled in 20 years, my house in a poor UK city has quadrupled in value. Starting wages have increased by about 70%.

edit: Also Myth 5 in the following article.

https://economictimes.indiatimes.com/news/et-explains/six-my...

Edit 2: An 1800 sft, duplex house, built in a 150 square yard property, cost about Rs. 13 million. And that is in a city like Hyderabad. Costs about double that in Bangalore, the top IT city in India and probably more in a city like Mumbai & New Delhi.

An average salary of an IT employee, with about 10 years of experience is about Rs. 3 million per year. Banks give a loan of about Rs. 10 million on that house, and employees usually source the remaining amount from further loans or high interest borrowings. Cumulatively, with current interest rates (have been stable for a decade now), EMI on a 13 million loan is about 0.13 million per month, meaning more than half of an employees salary, 1.56 million, goes to EMI payments.

Average rental value for that property is about Rs. 25000 per month, or Rs. 0.3 million per year. So hardly enough for covering EMI. Tenure on the loan is usually 20 to 30 years.

So, for most families, with wife and husband working, owning one house is within reach, but two is beyond capacity. With so much of income going to EMI, most choose to stay in the house rather than rent it out.

Another reason is lack teeth in laws that implement rental agreements. In fact, most owners hardly take any rental agreements or leases.

This must be great for people who like to move around a lot.

I don't disagree with you, but owning your own home can also be a step towards financial ruin if you choose the wrong home. I know a few people who bought homes that they ended up losing huge amounts of money on and selling a few years later. Beyond that, it's also a commitment that comes with a huge opportunity cost. If I buy I house in Texas and later there's an opportunity in Oregon, I've got to deal with the house first before I can take the opportunity in Oregon. Lastly, the math doesn't always add up. Sometimes it makes more financial sense to rent (at least temporarily) than to own, but you have to do the math for your own situation.

That might be part of the problem? It's extremely rare to make a profit selling a home less than 5 years after you bought it even in good-but-not-insane markets. Basically unheard of in under 3 years in not-insane markets. If the market slips you're easily looking at 7-8 years to break even. The math of a six-figure, three-decade loan just doesn't support quick flips even just to break even, and most people are way too proud to sell something for break even 5 years after they bought. Add in maintenance and it's easy to see how if you let that slip you can be on the losing end of a sale even 5-6 years later.

She bought a new built flat about 5 years ago in the outskirts of London. Following the Grenfell disaster it has gotten caught up in the inspections for fire safety and is now practically worthless until ~£70k worth of remedial works are carried out. She cannot remortgage it, she can't rent it out and she can't sell it. Pretty nasty scenario.

In Czech Republic you actually own a share of the whole building and the land it stands on.

I will never buy an apartment from reasons mentioned above. Just way too risky, at least with my own house it would be up to me what gets done and what doesn't.

If you want to buy a place to live so you don't have to work for a Lord, you want affordable housing. If you have a property which you want to be an investment, you want housing prices to baloon.

Currently the latter is winning.

If your argument is about splitting up land use by building higher, it still is true. At the end of the day, that land became more expensive and you are less able to purchase the land.

Appreciating asset and affordability are opposites by definition.

Aesthetic sentiments aside, those office buildings bring stress to the local infrastructure in many ways.

One win however is that local businesses that serve food and drinks at least survive which is not a small win during COVID-19 times.

Private property ownership and intergenerational wealth transfer is the foundation of middle class, and bigger middle class leads to better education for the masses, and a more democratic society!

Add up all the money you have spent on rent and mortgage payments and pretend it just never happened. It's life changing to have that.

I see it as problematic. Keeps the ground unlevel.

An interesting solution is to decouple the price of the house from the price of the land it stands on, and then the government could rent the land and use that income instead of other taxes. Better description of this idea is here:

https://astralcodexten.substack.com/p/your-book-review-progr...

The difference as you go down the wealth classes hits a point of, being able to afford a home at all or never being able to purchase a home.

Historically, housing has actually been a poor investment relative to investing in the stock market. Most people simply didn't know how or whether to invest, but nowadays investment vehicles like index funds and target date funds make that relatively straightforward.

We should be discouraging housing as investment so affordable housing can be a thing that exists and the housing market can respond to demand by building out the supply at levels people can afford while also encouraging people to sock away at least 5-15% of every paycheck into passively managed investment vehicles that have way higher long term returns than housing ever did.

The current situation is that we subsidize the middle and upper classes in terms of housing at the expense of the poor and those just starting out by artificially and unnecessarily pushing up the price of housing and constraining supply.

Even if you wanted to think of housing as an investment, it should be compared not to the stock market but to the lifelong cost of renting, since it's one or the other (unless you plan to be homeless).

I totally agree. It's obvious to me that home ownership is what allows the existence of a "middle class". That makes it a target for some interests.

If we choose to make having a home a priority, then we need to choose affordability both so that people are less likely to be homeless and so that people can do other thing with their money.

This is because homelessness is a side-effect of mental illness and drug addiction. The later is not all drug addiction, ( I used to live next to an "invisible" heroin addict which we only learned about when he OD'd) it's a certain type of disorganized-thinking and lifestyle which some addicts manifest.

The cost of housing doesn't cause homelessness; it causes roommates and the conflicts and violence and chaos that imposes on people's lives which is significant if under-studied.

The above assumes that you actually pay the house off of course. Many people don't.

It's impossible for a home to not be wealth, unless somehow infinite houses could be built for free.

So an argument can be had on how much wealth it should be and who gets to define that, but it is inescapable that it has some value.

Everyone striving to own a home is a consistent scenario, which has pros and cons.

Social housing that's owned by nobody/everybody is a consistent scenario, which has pros and cons.

Having some paying rent to others who own (or, even worse, have buy-to-let mortgages), is inherently unjust.

Why is it inherently unjust? The owner paid to have the building constructed. That took upfront capital. Asking the renter to pay for the use of this capital doesn't sound unjust to me.

Is renting out a car you purchased inherently unjust?

Much of the rent paid in big cities is not for the construction or maintenance costs, but the land value. Did the owner construct the land?

The land itself had to be acquired somehow. The very first owner paid for an army to take the land from the indigenous population that "owned" it, and that "cost" is a chain that is linked all the way to today (and at every step of the transaction, somebody profits by increasing the price a bit).

So either you raise another army today (at an even greater cost) to acquire the land, or you pay the asking price from the current owners.

No. People don't raise armies to steal land that's worthless. If you're going back to pre-history then the land near a nice river that has plenty of game, isn't predated by larger animals, and has nice fruit trees is worth way more to a person than some section of desert.

If right to live on land also goes with rights to exploit resources beneath the land then disparities in value as you approach the industrial era become massive.

You start with a place with nice fruit trees near the river, then a few people build their houses there, then someone builds roads and a port, then someone builds larger houses, then someone builds factories... and at some moment in the future, there is a huge city, but the river is poluted and the trees were cut down.

There is another place with no trees and no river. Hundred years later, there is no city.

Like the housing projects in the inner cities?

The problem with US housing projects isn’t that they are social housing but that they are deliberate concentration of the poor (and therefore also marginalized, as those are correlated), with the same consequences that always has, whether or not it involves social housing.

AFAIK those planning such projects did not themselves live in social housing (unlike, say, many soviet officials), hence there's still an element of hypocrisy there (note that I never claimed otherwise; I specifically chose the word "this" in the sentence you've quoted. I'll also re-re-state that I've not made any argument for or against home ownership or renting)

See here, for example: https://en.wikipedia.org/wiki/Subsidized_housing_in_the_Unit...

I paid off a house a few years ago. My flexibility with work and money went way up. I personally went from 10k CC debt and a house mortgage to well over a million in assets and rotating debt (for points) in a very short period of time. I did not really change my lifestyle at all. I went from planning out how to buy small items (which is normal BTW) to mostly 'do no think too much about it'.

Financial freedom was once put to me by an interesting 'when you feel like it' ladder. 1 eat whatever you want 2 buy whatever cloths you like 3 buy nice electronics whenever you feel like it 4 buy a used car with cash 5 buy a nice used car with cash 6 buy a nice new car with cash 7 travel whenever you like, and stay at an OK hotel 8 travel wherever you like, and stay at a nice resort 9 ...

I am somewhere between 5 and 6 now. Had a bit of a setback and slid back to 4/5 a few years ago. 5/6 is normal for my point in life I am at with my income. If I had less income that ladder is slower to go up. Also as you go up cash becomes less of 'how do I get more' and more 'how do I use this to buy me time'. My level up to 5/6 only happened because I paid off that house. My setback is because of a choice to move somewhere else.

But think about it this way. Whatever your rent/mortgage is. Think of having that amount of extra cash per month. Think how quickly you could use that to level up if you kept a similar lifestyle you have now.

Financial freedom is a matter of perspective on how you view material wealth. Some people never feel free because they are always looking to ladder up. Some people are fine at the low levels because they see material wealth as a burden.

I live in a high COL area, when I moved out when I was 20 rent was more than half of my income. I'd get raises but my rent would continue to climb. 5 years ago I bought a house, my rent stopped climbing. Now I can't even get a apartment for 125% of my mortgage and that is without a yard, with neighbors a half inch of sheet rock away, and no equity.

This means that while yes I still have to work, it isn't the end of the world that I get fired or miss a promotion. I no longer need to push hard to drive up my income like I did when I was in a apartment. So now I have more options, when a PM screws the pooch and misses a requirement I attend my daughters soccer game as planned instead of staying late.

If that isn't freedom I don't know what is.

There are safety nets for big things - not always good ones, but they exist everywhere and so when something major goes wrong you can count on some help. However there are a lot of little things that are both far more likely to go wrong, and also things that it is harder to get help with from any sort of safety net.

The 'they' you rail against who are amassing properties as massively subsidised wealth accumulators are exactly who this article is arguing against. Deregulate, open up the markets and let people decide on their investments of choice in a competitive environment. Are you really arguing that?

When you file taxes, you can take the "standard deduction" that everyone gets. A downward adjustment to the amount of your income that is taxable. Or you can "itemize" your various tax breaks, if they add up to a total greater than the standard deduction.

Historically, home ownership has been "subsidized" in the sense that the interest one pays on mortgage loans is one of the things that can be itemized. And historically, that was usually enough to push you above the standard deduction amount.

But now, the standard deduction amount has been raised to such a high level that only the wealthy and very upper-middle class have any reason to itemize anymore. Typical mortgages now are no longer enough to get you any special treatment on taxes, beyond a renter who also takes the standard deduction.

Of course, this outdated talking point will probably stick around for years, though...

Interestingly, Georgism agrees with you: the problem is that since land appreciates in value (as the supply is fixed and demand increases), there is an incentive to hoard it speculatively. George proposes a high land tax to negate land appreciation, and make it so it is only profitable to own land if it is effectively used (to live or to produce on).

Having corporations own land instead of individuals is just about the worse compromise that can be made.

The problem starts when people view their homes as financial investments instead of lifestyle security.

Here in London, rent is <50% of mortgage payments on an equivalent property.

I think everyone would agree that that is not financial freedom, but it's commonly accepted and taught that your rent/mortgage shouldn't be more than 30% of your take home.

I moved to a MCOL city where my mortgage is <20%. my salary

The core problem is that once you have a majority of the population owning an asset, they're incentivized to pull the ladder up behind them, and make it difficult for the non-landed to also buy the asset, to make the value of their asset go up.

> Owning your own home is, in my view, the first step towards financial freedom.

Sure, for those lucky enough to be able to buy a home before it gets too expensive. What about those not lucky enough to do so? Do they not deserve financial freedom?

There is nothing about the previous "landed" status of my neighbors that will affect the value of my property. Not to mention, if you're seeking to reside, not speculate, the "value" of the property is kinda immaterial.

Suppose everyone who wanted to had the ability to own land in New York (obviously not possible geometrically, but for sake of argument). Do you think that property in New York would still be worth the same?

Land only has a buying price/rent because there is an unmet demand. This is a principle economists realized centuries ago: https://en.wikipedia.org/wiki/Law_of_rent

> Not to mention, if you're seeking to reside, not speculate, the "value" of the property is kinda immaterial.

The modern property ownership system basically forces homeowners to be speculators. If you have to pay hundreds of thousands (or even millions!) to buy a home, are you really going to be okay if it takes a massive hit (or doesn't go up in value as much as expected)?

New York is a port. Ports become cities, because access to the rest of the area is kind of needed to access the rest of the area. Ports are valuable.

> If you have to pay hundreds of thousands (or even millions!) to buy a home, are you really going to be okay if it takes a massive hit (or doesn't go up in value as much as expected)?

Unrealized losses aren't real losses. It's one of the things that confuses me about cars as well. I buy a car, I drive it for as long as possible. I'm not looking to resell it. Same with property. As long as when I sell it, I'm not losing money to sell it, I'm good. Because I'm not selling to make money, I'm selling to divest myself of the obligation of ownership for some reason.

And it's important to note that I said that I'm not losing money to sell it. If I owe on it, I want to sell it for enough to cover that and any closing costs on my end. Other than that, I don't really care. I'm not a real estate investor.

Sorry, I'm completely lost as to your point here. My point is simply that land is valuable because it is scarce, and its value is the difference in productivity between the given land and the best free land. From that, it follows that if land values are high, there's a massive difference in productivity between high value land and the best free land.

> Other than that, I don't really care. I'm not a real estate investor.

It's great that you don't but your view isn't the majority view. Homeownership is considered as a way to build wealth for the middle class, and this view is pervasive. This is pretty much said all the time, everywhere ("homeownership wealth", "intergenerational wealth", "buying a home is a good investment" etc.), by both politicians and the finance industry, so I'm surprised you don't think this is the case.

I'll give a concrete example though. A member of Parliament responsible for housing policy (Adam Vaughan) was asked if a 10% drop in house prices (after a year of ~30% rises) would be acceptable, and his answer was no, because "We know that Canadians rely on home ownership to secure their place in the economy now, but also as they retire". I doubt his view his uncommon either. He's simply stating what homeowners (who are the majority) think.

Because housing security is also inherently valuable.

Also, what's to make the words of Canadian parliament the truth? Does he not have a vested interest in a certain outcome? Residential home owners aren't looking to "wealth" when they buy a house. They're looking for residence.

You can make the property you own hard to buy or easy to buy; that's obviously up to you. The problem is that landowners pass laws that make it difficult for prospective owners to buy any property or for current owners to build new units on the land they already own. This is fundamentally illegitimate, but unfortunately it's very popular.

With real estate "location location location". In some areas there are situations that will make one or the other better. Everybody has their own life goals, and that in turn will feed into what is better for you.

For a while, usually yes. Long term, no chance.

A mortgage can only ever go down. Rents most of the time only go up.

My mortgage was initially over 3K while rent had been ~1.5K. But years later, those equivalent rents are ~5K and my mortgage is under $1K. In a couple decades when I'm retired, who know how high those rents will be? But I know exactly what my mortgage will be, $0.

The thing is, a landlord isn't likely to continue renting out if they're losing money. Typically, the money for services, maintenance, etc. comes from rent.

The renter is indirectly paying for those, otherwise the landlord would be out of business.

Approximately never are any of those costs taken care of by the landlord! The renter is paying for them, plus a profit margin for the landlord. That's what rent is. The landlord isn't running a charity.

Only exception is if you luck into a rental by someone who paid off the property long ago and doesn't care to charge market prices for it.

You are absolutely correct, mate.

The flaw the assumption is that somehow 'buying' a home that is 15x your annual salary, that takes your entire life to pay off, is some kind of 'freedom'.

A mortgage is debt, yes. However the money you put into the mortgage is wealth that you're slowly accruing. If you're just renting a property someone else owns you're not accruing anything at all. No one thinks that taking on a 20-30 year debt is a good thing. People only do it out of necessity.

Housing that costs half as much as it does today, and doesn't grow faster than consumer price inflation?

I think they're only looking at it from a financial freedom point of view. But I, too, don't see a 30-year keeps-with-inflation anchor as freedom.

I'm also not sure that reducing home ownership is a good idea - "let's make everyone poorer" doesn't sound like great policy to me, especially at a time where asset prices are inflating like mad. What's the actual alternative to people owning their own homes. Would we be better off all holding shares in housing companies?

I also take issue with this idea that we should all be living in skyscrapers. If you go off and build skyscrapers. Maybe some people want to live in skyscrapers but if the result of this policy is that the middle class who used to be able to live in a nice semi/detatched house are now living in flats in a skyscraper that is a massive detriment to their quality of life. It's like the problem we have with Houses of Multiple Occupancy in the UK. It's a fine concept to break up a 4 bed house into 3 flats and sell each individually but you need to understand you're making it economically unviable for anyone to ever afford a 4 bed house anymore in that area.

There are serious issues with housing, and the massive disincentive for people to downsize is definitely one of them, but a lot of these policy solutions are just trash.

Yes, but constraining the supply is done through political means: planning laws, green belts, individual objections to developments, voting etc. All of those in theory are based on "one man one vote", so if you concentrate ownership of supply you drastically reduce the number of votes it gets.

> the middle class who used to be able to live in a nice semi/detatched house are now living in flats in a skyscraper that is a massive detriment to their quality of life

People in Singapore really love their flats. I think what people don't realise is that the space between the skyscrapers is well used with lots of playgrounds, parks and sports facilities. It isn't giving up your garden: it's swapping it for a much larger shared garden with facilities you could never dream of affording on your own.

HMOs aren't a fair comparison because they have comical soundproofing compared to modern flats.

It is odd that we have simply accepted that the government has the right to tell everyone if they can live in a flat or a house.

I could think that arranged marriages are much better than choosing your relationship; but that doesn't mean I think that it should be a government policy and government should ban your own choice of relationship. You can have an arranged marriage if you want, even in the West. It works for some people, doesn't work for others.

Some people love flats and renting. Some like owning a flat, some like renting a house, some like owning a house, some like living in the woods off grid, and some like backpacking around the world without a house. Choice is great.

I think a fairer comparison in terms of relationships is like polygamy: forbidding people to live above or below you is a bit like taking away extra potential spouses. I believe polygamy is illegal in most societies due to the inequalities it causes.

Well let's not forget lobbying, corruption (more important than lobbying in some parts of the world, e.g. my country) and the plain and simple fact that politicians are usually quite rich (in many countries, not all) and so will own and rent houses, while having great influence on local laws.

I still think a shift would matter. There is some evidence for this in the UK because homeowners generally vote Conservative, but people are becoming homeowners later in life and less often. So the Conservatives are running around terrified that they're going to lose voters in the long term.

They have introduced quite a few inflationary policies subsidising the first purchases young fairly wealthy people.

I think also the way they have pivoted more recently to focus on the "culture wars" and (English) nationalism is a way to encourage older renters to vote for them.

And for some people, that's great. For me, not living in a flat in the city (quite the opposite) isn't because I want a garden and facilities all my own. It's because you can't control how terrible your neighbors are, so if they're farther away from where you spend most of your time, even if they're terrible, they have little impact.

Take a loud neighbor who works nights. He'll play his music loud at hours you'd be sleeping, and pound on the wall at hours he'd be sleeping, because you're too loud.

Now add 5000 square feet of land between you.

"Good fences make good neighbors."

Terraced houses are common in the UK and are the worst of all worlds: poor noise insulation from neighbours, tiny dark gardens and very low density.

You've obviously never met my neighbors. But noise is just one example; far more annoying when I was in an apartment was someone smoking below my balcony on a hot night when all I wanted was to open the windows.

And I suppose you'll tell me that filtration systems could take care of that, which is true, but staying locked in a closed apartment is, as has been recently shown, terrible for your health, physically and emotionally.

It's no use, I shall keep my yard and clear, dark skies where you can see the stars, and wildlife.

Your stars sound good, but I don't be able to give up being able to walk everywhere.

Genuinely curious: when has one-person-one-vote ever really constrained special interest groups, particularly in the US? Large corporations tend to get their way a lot during legislative sausage-making, and they have zero direct votes. Maybe votes actually don't matter that much?

> People in Singapore really love their flats. I think what people don't realise is that the space between the skyscrapers is well used with lots of playgrounds, parks and sports facilities. It isn't giving up your garden: it's swapping it for a much larger shared garden with facilities you could never dream of affording on your own.

Good for them! One question: could I add my own flooring to my flat for allergy purposes? If the neighbors are loud after my kids' bedtime, can I ask them to stop? Will that cause tension? Would I need to call the police if it escalated?

(I'd be much more interested in exporting Singapore's health care system to the US, which seems quite compatible with American cultural and economic constraints, than its housing policy, which seems entirely mismatched to housing constraints in 95% of America.)

I think Brexit is a good counterpoint to this: almost every large corporation thought it was a terrible idea, but it still got voted through and carried out.

> Good for them! One question: could I add my own flooring to my flat for allergy purposes? If the neighbors are loud after my kids' bedtime, can I ask them to stop? Will that cause tension? Would I need to call the police if it escalated?

With a HDB flat you can do whatever you like - you buy a 99 year lease with the assumption that the building will be demolished after then.

I don't really know Singapore well enough to give you good answers on your other questions, other than that sound insulation is generally good and people really respect the police in general.

I guess they couldn't state it openly, e.g. like:

"Let's bypass democratic majority rule, by taking away something people vote to protect - and not just anything, but their homes -, and consolidating its ownership to fewer rich property moguls and conglomerates"

Because that would immediately strike people as a tad worse than North Korea...

The trouble is that it is only a local majority. There are a larger number of people who would like to live in high-demand areas, but they can't vote to make that possible because they don't live there.

> by taking away something people vote to protect - and not just anything, but their homes -,

No-one is suggesting taking away their homes. Just making it more uneconomical to sit on land that has been improved by the state and profit from the ensuing increase in value. I personally would advocate for making these changes to the tax system very slowly, perhaps over the course of 20 years or so.

> and consolidating its ownership to fewer rich property moguls and conglomerates

They don't necessarily have to be rich. I personally wouldn't ever invest in a property conglomerate - they're far too unprofitable and buffeted by political winds. Software is where the money is at, but if you're on this website you already know that.

Any majority is a "local majority".

Would it be OK for third parties to come into your community / town etc, and decide for you?

That would be a nice racket for lobbyists, too: various interests could hire majorities to move from place to place and vote to overturn what those already living there want...

But this is a case where we're taking about outsiders making it more difficult for locals to hold to their homes, so they (the outsiders) have it easier to live in some place.

How is that OK? Ousiders "really" wanting to live to that place is not enough justification (people want lots of things. Many people want a pony too, doesn't mean they will get one or that they deserve one).

Plus, those outsiders only want to come live to a place (over other places) because the place has been developed well by the locals.

So they like what the locals have toiled and paid to build, and want to make it easier to throw the locals out of their homes, to rent there themselves. Doesn't sit right...

More generally, who could reasonably be considered to have a legitimate interest in housing policy? I can think of a few potential groups:

1) People who own homes in the locality

2) Renters

3) People who work in locality but commute

4) (This is the biggest stretch) People left behind by economic geography

On economic geography: as the economy evolves over time, the location of jobs changes. As farming is automated, there are less jobs in the rural Midwest. After the steel mills closed, Pittsburgh lost population. As the economy has become more knowledge and technology oriented, more jobs have moved to relatively dense urban areas that can support very liquid job markets and a high degree of labor specialization.

Obviously there's a lot of subjective trade-offs here. Personally, I feel there should be a middle ground (on policies around development) between "kick existing residents out of their homes" and "no middle class housing in areas with lots of job growth".

I'm predominantly suggesting making it easier to build new high density housing. The other side is to slow move to taxing estimated land values rather than house prices. This means that you pay for your share of the benefit you get from improvements to the land that you didn't make - a new metro line, for example, or a new supermarket or school. But if you renovate your house you wouldn't pay any more in taxes.

> Plus, those outsiders only want to come live to a place (over other places) because the place has been developed well by the locals.

Most infrastructure funding comes from central governments (at least in the countries I am aware of) so I don't understand what you mean by this exactly.

All these "collective" behaviours have appeared since then helped along by government campaigns: https://remembersingapore.org/2013/01/18/singapore-campaigns...

(Note that one of those campaigns - speak Mandarin - was encouraging people to abandon their native languages and learn a completely different one. It was highly successful. I think by comparison "don't throw litter" would be extremely easy.)

Your gross-generalization is so poorly constructed it's hard for it to be wrong, never mind right. So I'll ask you a few questions instead.

How would you even begin to test your claim in a realistic way? What time period/s would you select? Even if it were true, would it matter? Would efforts to solve these problems best be dealt with government policy/funding/enforcement or by pushing "Asian culture" in Europe or Africa?

Do you really mean East Asia? Does Bangkok, New Delhi and Manila count as Asian? Does a skyscraper in the Philippines surrounded by gangs, illegal trade and graffiti not count if it is made of garbage (https://en.wikipedia.org/wiki/Smokey_Mountain)? What if it was closed and re-opened elsewhere, does that mean the culture changed twice?

Is your generalization "significant" in understanding why Tokyo is cleaner than New Delhi or Bangkok or why Toronto has fewer youth gangs than New York? Was their "respect" for "the commons" in Singapore in 1964 when youth gangs and others engaged in race warfare? Or is it just more respect for the commons now that Singapore is no longer part of Malaysia?

How does a communal "respecting their commons" work when most people in a society think it is okay to conduct trade in ivory or whales, that are illegal under international law? What about dumping plastic in the ocean, where Asia in the main source? Or does the "commons" not count if it refers to the rest of the world? Perhaps how much money a society has to clean up pollution is more predictive than culture? Maybe individualism is useful when an entire society needs to change in some fashion and perhaps less useful when norms are reasonable?

Is there a chance that you are bothered by the problems you cite, but find it convenient to say "culture" because it allows you to wash your hands of these problems?

Unfortunately most of the influencing of politics isn't accomplished by voting, it's done by lobbying.

So it's sadly the opposite. The more you concentrate ownership, the larger those mega-landlord-corporations become and the more clout they have with the politicians.

Take Paris or Berlin with their 5-8 floor buildings as far as the eye can see. That's a moderate density for a modern city, leaves space for green spaces, infrastructure and is so dense that everybody can sort-of affort it while not so dense that everybody is just anonomous. You can still know all neighbors in your building by name. (That there is a problem with exploding rents is a separate issue.)

As contrast, take the average north american city with a million residents. most either live in a detached house or in a 30+ floor skyscraper. Of course the detached houses rather close to a city center won't have much space around them, so you hav 1.5 bushes and then there is the fence and next house. The lots are worth millions and out of reach for most unless the go super deep into debt and have a lot of luck. Or you live in an anonymous skyscraper silo. There is an alternative to all this, but all that's happening is that excuses are ruminated back and forth.

Higher density has pros and cons. Living in higher density areas can increase quality of life significantly, if you can walk to work, groceries, pharmacy, restaurants, friends, etc. See https://www.theguardian.com/world/2020/feb/07/paris-mayor-un... for example.

Obviously the extremes (1 bedroom skyscraper flats and living 1h away from civilization) won't work for most, but there is a spectrum where people will choose different things depending on their individual preferences.

High density cities are not the only way to have that. Another one is small villages where everything is grouped together. I easily walk to multiples of every category of place you listed even though I live in a very small town.

I can walk to the nearest shop fill a small rucksack/daysack with the day's shopping and be back home in 45 minutes without hurrying.

When I used to buy groceries daily on foot, it took me about 5 extra steps, one way, to get to the store from the sidewalk that I was already traversing from the bus stop that was 150m from my apartment... and then I carried them 100m to said apartment. That is the density that most people can accept when they think about "walkable"... These days I pick up a week's worth of groceries (impossible to carry, and I say is as a backpacker) on my way from the gym, or occasionally in a separate trip that takes the same 25 minutes round-trip for travel, except I do it once a week, or could do it even more rarely. And if you drive, it doesn't really matter if the store is 2-3km away on the street (which it is), or if it was 10-25km away on a highway.

Again, my point is, for most people, in most circumstances, 1km is a borderline unreasonable walk, and 2km is absolutely unreasonable and not "walkable" in any way. Sure, for some people in very special circumstances (and climates, or times of year) it might work out, but that is not a good basis for policy.

Also frankly it's just an inferior quality of life when your walk is to the grocery store thru dense burbs... I happen to have 2 large-ish parks nearby so I walk there, but not every day and in any case neither is on the way to any grocery store. I would never just walk around the neighborhood - instead, if both were 1km away, I'd drive to a park or a hike if I had to... then drive to a grocery store.

Similarly, regarding: "unviable for anyone to ever afford a 4 bed house" - it's not like areas that ban conversions to flats have cheap 4 bed houses. They have expensive 4 bed houses, often filled with 4-8 roommates who likely would prefer their own flat.

It started as way to rent a spare room - fair enough - and if it had stayed like this, its impact would be bearable. But like it evolved - full residential quartiers acting as large hotels - made the housing market unsustainable for the inhabitants not participating in this game.

I would also be interested to see what would happen if the rental and sales markets were forced to only supply houses which matched the current building codes - it would make building much more competitive.

on the other hand, individual home owners would be stuck unable to sell their property, because it would drop in value. (even if they could sell it, not everyone would want to buy it). i am not sure if that's good or bad.

in any case everyone would be forced to keep their buildings up to standard.

It's good because it would motivate owners to own only as few houses as possible (to minimize work on updates), and many more people could own a home then.

That would either destroy vast numbers of perfectly usable and often interesting or historic buildings or require the creation of a system for giving exemptions in order to preserve them. And of course this gives an opportunity for corruption and cronyism.

What this fails to acknowledge is that the demand for density doesn't change when you outlaw it. All you've done is taken away people's choices, mandated your own preferences, and still in the end all the same demand for more housing goes on existing just the same, anyway, so prices continue to rise.

It may be true that all things being equal most people prefer detached single-family housing, but all things aren't equal! And so we have to acknowledge the tradeoffs and take the demand for more density seriously. (The fact that in order to get detached single-family housing in high-demand areas you have to make the alternatives illegal is I think pretty strong evidence for this.)

Having to own a car, maintain lawns/garden or pay someone for it, and having to commute for hour one side instead of 15 minute walk would be an extreme detriment to my quality of life.

But the quest of that goal can be a problem - mortgages (to expensive, to big), the choice of owning a property rather than living in a better property (size, quality, location) can be a blight on peoples lives.

Of course the resulting 2 bed flats are still on the market for $1M USD.

This seems theoretically nice but is not in practice the case. Homeowners are immediately present, voting locally, political NIMBYs.

Homeowners who are ostensibly in favour of increasing the housing supply, still don't like it when it affects their own area (and know how to effectively campaign against it locally).

Landlords just don't care that much (in this instance) - an increasing local population heralds local economic growth and a potentially increased value of their property portfolio.

that does not follow - if that someone does not want to sell them or make profit on the rent, why would he constrain the supply?

"What's the actual alternative to people owning their own homes."

The state, the city, not-for-profit entities owning them, for example.

"I also take issue with this idea that we should all be living in skyscrapers."

I agree with that and also think it's much better to live in about 5-story high buildings; the quality of life and price is much better with those.

Why wouldn't that someone want to make a profit?

> The state, the city, not-for-profit entities owning them, for example.

That'd just make each individual eternally indebted to the state, at the whims of bureaucrats and vulnerable to political punishments while the costs wouldn't come down by much, because the state generally sucks at doing these things.

Because they are not a for-profit company or institution? Public housing is often owned or managed by such entities. Also there can be other incentives besides direct profit; a city can build flats to encourage people to move and live there. The city will profit from the economic activity this will bring. In that case the city has a motive to have a larger, not a smaller, supply of flats.

> That'd just make each individual eternally indebted to the state, at the whims of bureaucrats and vulnerable to political punishments while the costs wouldn't come down by much, because the state generally sucks at doing these things.

The state may generally suck at doing these things, but nevertheless this is the way it works in some places and works good in some of them. In a different thread I mention Vienna where around 220'000 flats are owned by the city and another 220'000 are indirectly influenced by them which together housing about 25% of the population. The city started this program at the beginning of the 20th century when 300'000 people didn't have a place to live - it's obviously much better now. So maybe it's not a completely broken way of doing things?

Hard to say. How would Vienna look, and how many people would be able to live there at what cost if it hadn't? I'm absolutely not opposed to the state getting involved when there's a crisis, or the investments required are too large, e.g. creating the first power plants, railways etc. But if you let it remain with the state, you typically get crumbling infrastructure at high prices with lots of bureaucracy.

We have public housing in Germany, and it's nice-ish because the rents are cheap. But generally, the bureaucracy is large, the inefficiency and corruption runs rampant, the quality is subpar and they're constantly at risk to be sold off when the next mayor wants to spend money on a new air port or some policy their voters like.

The interest of the state are not aligned with those of renters. The state could certainly build great apartments, but only for a small number of citizens, while the rest would have to fund it. It then becomes a lottery: are you lucky enough to get one of the lottery apartments? Congratulations. For everyone else: well, sucks. We can remove the middle man bureaucracy in that case, just make everyone spend half their money on the lottery.

If you want the interests to align, just use a private entity, like cooperative housing. And the best thing about that? It's completely voluntary, no need for state involvement, no need to force others to fund it etc.

I completely believe all of that. It's still much better than here in Slovakia where public housing is pretty much nonexistent, most people own their flat/house outright and if you live in a rented property people are looking down on you. As a result there are on one side scores of people who live in their own house in so-called 'hunger valleys' where they can't find work and on the other side lots of available employment roles but no affordable living in the cities.

> If you want the interests to align, just use a private entity, like cooperative housing. And the best thing about that? It's completely voluntary, no need for state involvement, no need to force others to fund it etc.

I already mentioned Slovakia, so I can continue with that: a private entity first would have to acquire land suitable for flats and get all the planning permissions. Land is scarce and regulations complicated. It's made worse by the outdated building code, and the state is not really incentivized to update it. So I think interests would be better aligned if the state decided it wants to really support building new housing instead of only paying lip service to it.

Cooperatives are member-owned, so essentially you + 100 other people would get together, each put up a bit of money, get a loan from the bank, and build a house for all of you to live in. They're not-for-profit entities, they exist to apartments to their members. But they're explicitly not the state, so they're not a tool being (ab)used by politicians.

> So I think interests would be better aligned if the state decided it wants to really support building new housing instead of only paying lip service to it.

I agree, but I believe that would only be temporary, and as soon as they no longer accidentally align, you'd be in a tough spot. This is different in a cooperative entity, where renters = owners.

Why aren't more rentals being created in Slovakia? Just because of social stigma of not owning?

The issue is to acquire land suitable for housing, which is scarce. The suitability itself is defined by various regulations. The state can (and should) change the regulations. The state can (and should) update the building codes, too.

> Cooperatives are member-owned...

Yes that is clear, but as they are explicitly not the state, the state has sadly no incentive to help them. The state also does not help the cities to build housing. The private developers always find a way to build flats, but as you can probably imagine, sometimes corruption can be involved and that makes the resulting product expensive.

Also cooperatives are problably not really trusted here; people fear being taken advantage of, so they mostle care about themselves. Each one for himself, that is our society in a nutshell. See also Covid mortality. Sorry for the off-topic.

> Why aren't more rentals being created in Slovakia? Just because of social stigma of not owning?

Partly that. Also the aforementioned complications mean that new developments are expensive and are marketed as luxury. And the demand for housing is huge so the developers are catering to the high-margin end of market and are not interested in long-term rented property management.

Most European states do a great job of this - the suck part comes (like in the UK), when the state stops supporting this and a generation of people are left without decent housing options.

No structural homelessness problem (beyond the rare addiction victim), new social housing being built rather than relying on housing built 60+ years ago, no/few state subsidies to a private rental sector preying on social tenants etc etc. Just because it is not perfect doesn't mean it isn't better than 95% of the alternatives.

One place that does it better is Austria - the Vienna model of social housing provision enables lower classes to live well in what is one of the world's most expensive places to buy housing in.

I'm not sure what you're referencing -- most social housing is done by private entities with state subsidies. Many local governments have set a minimum amount of social housing for new projects, so e.g. 30% of apartments (or by square meters) have to be done as subsidized housing. That aside, I'm sure that it's possible to do worse, but that doesn't make it great.

If Vienna has found a way to make the state work efficiently, I'd love for them to export it. So far, I've not seen that happening in any of the industries it is involved.

In the 1970s in the UK, some on the left saw council houses as a bit like people see Universal Basic Income these days. That the state should provide everyone with a (modest) rent-free house.

That might seem extreme, but it was actually pretty moderate when the competition was soviet communism. And at the time interest rates were >10% so mortgages were a big risk and put a lot of money into someone else's pockets.

Some of the housing stock built in that time was really good quality; the council built it, and knew they'd have to maintain it, so they went for durable options even when they weren't the cheapest. Modern homes are lower quality in some regards, as the house builders know the maintenance is someone else's problem.

The cooperative was founded by workers in the 19th century and has a single purpose: To provide affordable housing, satisfying the needs of their members. It isn't subsidized by the state, its business model is simply to distribute the expenses for building and maintaining the flats to their members.

Home ownership has the disadvantage of being too inelastic and imposing the risks of owning a house to individuals. Renting from a private company on the other hand means you constantly have to give up a significant portion of your income so someone else makes profit from basically doing nothing.

Cooperatives strike me as the best solution to this dilemma. It's of course not surprising that the Economist doesn't mention this at all, the flaws of their argument have been sufficiently demonstrated by other commenters. The basic recognition that home ownership is flawed is an important point though IMO.

You might pay less in a cooperative, but you're expected to be more involved in its internal politics and in keeping things running, so you're likely making up for the lower monetary price by paying with your time and energy.

There are also many opportunities for interpersonal conflicts.

> you constantly have to give up a significant portion of your income so someone else makes profit from basically doing nothing

When something goes wrong in the house I rent (which has happened multiple times), it's up to my landlord to fix it. The landlord also has to spend time and money on upkeep and maintaining the property.

It's certainly true that individual landlords have some trouble with renting out their property. The majority of homes however is held by companies, whose administration deals with renters. Maintenance costs of a single home can be uncertain, but of a number of homes it's very predictable. So the risks of big companies holding properties is manageable, and in no proportion to the profits that big conglomerates such as Deutsche Wohnen make.

I also own a property myself in a different country.

Big companies don't own the majority of homes in Germany[1]. This is just the left-wing version of right-wing people overestimating the number of immigrants in a country.

https://www.quora.com/If-so-few-Germans-own-their-own-home-w...

This is unfair. There is nothing wrong with passive income. Owning shares or bonds, or having a bank deposit is also "doing nothing" yet no one would blame anyone for it.

The wrong part is that having passive income of that kind is a privilege that only few can reach, and it works by squeezing the rest. It isn't possible for everybody to have such passive income.

Honestly, private landlords should not be a thing. Holding a house hostage isn't a job.

The former results in community, and investment and a large number of beneficial economic effects.

The later is simply an economic parasite

Only have to look to the past to see what happened with farming. Substance farming and feudaliam was inefficient and disincentified investment.(why improve land you don't own and someone else reaps the benefits of what you sow?)

It is a service that comes with plenty of duties and risks, at least if you want to have a reasonable reputation.

It probably depends on local market. I can imagine that in Silicon Valley, bad landlords can get away with almost anything, because the demand is so strong. Outside such economic hubs, the market situation is much more balanced and getting a good tenant who won't smoke in the house and destroy furniture is not trivial.

A friend of mine rented out a small apartment inherited from his grandma (nothing expensive, a rust-belt city in Eastern Europe that just keeps itself alive) and found out that the tenants turned it into a meth factory, when police came knocking on his door to ask unpleasant questions.

You never felt like an economic parasite. Maybe your tenants were okay financally and you didn't squeeze or kick them out. But some renters do squeeze or kick out poor people. That's where the parasite part comes in.

It's not really that subsistence farming is inefficient, it's just that subsistence farmers (by definition) are not selling food on the market.