this post was submitted on 29 May 2024
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In case anyone still wants to somehow debate whether the Liberals will deliver affordable housing.

“Housing needs to retain its value,” Mr. Trudeau told The Globe and Mail’s City Space podcast. “It’s a huge part of people’s potential for retirement and future nest egg.”

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[–] cygnus@lemmy.ca 108 points 7 months ago* (last edited 7 months ago) (10 children)

Housing CANNOT be an investment, and I say this as a homeowner whose house value has nearly tripled since I bought it. I bought a house simply because I didn't want to rent for the rest of my life.

It's obviously absurd to claim to want affordable housing and refuse to cause prices to go down. If housing is an "investment" then you are by definition fucking over all subsequent homebuyers. Everybody needs a place to live.

[–] LodeMike@lemmy.today 1 points 7 months ago (3 children)

It shouldnt be an investment but it should still have value. As in it shouldn't be commoditized but should still be a way to "store" wealth.

[–] Numberone@startrek.website 11 points 7 months ago (1 children)

Can you elaborate on this? I've always thought that housing is an absolutely terrible "store of value". Given the fact that appreciation at a population level, by definition means housing will be less affordable for the next generation. How is value for one generation balanced against subsequent ones. Also, it's an incredibly inefficient way to build a nest egg or whatever. If you pay a mortgage like most people do, over 15-30 yrs, you're paying something on the level of 150%-200% of its value over time. It seems to me a more rational way to build value is to keep housing costs low, allowing people to invest that difference (mortgage interest) into either investments or savings, rather than paying it to a bank.

I get that the US doesn't really have a culture of saving, but I feel like this is rationalized by the "my house will be more valuable when I retire" crowd. It's so easy to save now, with efficient investment products broadly available to individuals. Maybe it's time to let the house as the bulk of your wealth go, and make housing affordable again.

[–] LodeMike@lemmy.today 2 points 7 months ago

How is value for one generation balanced against subsequent ones.

I don't know actually. By market regulation? By ensuring new housing isn't a PITA to build and telling NIMBYs to fuck off? You'd also need to regulate the other way. Ideally a maintained house wouldn't have its value changed that much over time. And it would be adjusted to inflation.

if you pay a mortgage like most people do over 15-30 yrs, you're paying something on the level of 150%-200% of its value.

Yes and your net worth accumulates 50%-66% of what you pay. That's better then the 0% for renting. AND you don't need to complete the mortgage to sell the home and reclaim that stored wealth.

And yes housing should be affordable. I'm saying all this within the context of some kind of free market economy with some kind of private property. Being able to add most of your home payments to your net worth is very helpful in the long run. Especially if you need the Monet, you can switch to renting. Again, ideally, that would be the same cost as a mortgage, as the landlord would be using that rent to pay down their mortgage or whatever.

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