If only the problem weren't self-reinforcing where existing homeowners have the majority of their net worth tied to their home and thus double down on fighting any policy that would reduce home values.
Is this actually a problem? Why would people want more of their net worth tied up in their home? Wouldn't cheaper homes make the properly ladder game more accessible? Are people leveraging their current home value enough to need it to be higher?
It's not that they want it to be such a fraction of their NW, it's that it already is, because they were doing that which is popular and makes them higher-status. Given that it already is, I can see how they might be fine with some kind of grand compromise whereby they lose the potential NW gain from the home, and get something in return without the malicious incentives, but that would probably be too expensive to get majority support.
People use their homes as part of their retirement plan - this is doubly so for those of us that expect Social Security to be gone by the time we retire.
You have to account for the "I got mine so screw the next guy down on the ladder" mentality. One of the _real_ cross-party political issues is just how selfish and anti-community most Americans have become.
Another real cross-party issue is how quick people are to label other people doing their best to make it in complex systems as selfish and immoral.
If you have a $400k mortgage on a $500k asset, and I'm proposing systemic changes to make it worth $250k, you'll end up owing $150k more than it's worth. If something happens and you lose your job, you're screwed. You can sell and refinance and you'll still owe nearly as much every month as the person who bought your newly cheaper house, but now you don't have a house.
It's not about "I got mine, fuck you" so much as "this is my life's savings you're talking about making dramatically smaller" and "I'm super leveraged on this asset."
Yeah, but if that happens, the economic factors leading to a housing crash (i.e. mass unemployment) will almost certainly also prevent most people who need affordable housing from being able to purchase it.
All else equal, getting rid of superfluous zoning rules that are preventing new construction and thereby lowering prices, wouldn't harm those who close to being able to afford housing today. Relaxing zoning doesn't hurt the economy. If anything, restricted zoning limits the economic growth we need.
That I completely agree with. It just sounded like the parent suggested that a housing crash would somehow make real estate affordable for everyone, which clearly isn't the case, based on what happened in 2008.
A 'serious correction' would erase the wealth of the home-owning middle class. A pause on mortgage payments and interest simply extends the mortgage schedule by a year.
Exclude all for profit property, and all second homes. All of America is suffering right now. If we protect the land owners we're only lengthening the noose around all of necks.
I was not clear. Give mandatory breaks to all renters in for profit apartments. Give breaks on primary residences up to the median home value less the top 10% of homes. No breaks for people holding vacant, second, vacation, rental, speculative, or comical I commercial for profit properties. If they can't weather the storm they don't deserve to keep the properties.
> Give mandatory breaks to all renters in for profit apartments.
> No breaks for people holding [...] rental [...] properties.
Some of those rental properties might no longer be rental properties if their owners are insolvent, particularly in the case of 1 or 2 family homes. Banks do not want tenants.
The housing market is in bad shape as-is. Prices falling for housing would be good for a struggling middle class and below. Some states, like California, have policies that distort a free-functioning market. Many cities have artificially constrained housing stock by limiting new development via zoning.
I agree that zoning is a big part of this and would be an easy release valve for people who want to own homes. I'm betting with everyone going work remote as well, cities can be more diffuse when commutes become less important.
3 signatures so far. If the housing market, core to our economy, can be insulated from a crash rebuilding will be significantly easier.