I’d rather have a fix for our broken credit system. Denying someone a loan that will be a 2200$ house payment in an area where they will be lucky to get a 3k apartment is insane.
This is a band aid size solution on the gaping wound problem of housing shortage. She should really be putting her time into coming up with an answer to increasing housing supply
Increasing housing supply is explicitly part of her announced plan. Are you under the impression that this was the entirety of her announced economic plan?
Probably.
It’s like how Biden’s Student Loan plan was longer than the headline of “forgive x% of them” and people wrote paragraphs about how it also needed to do XYZ, without reading enough to see it did.
This would be great but you know centrists will fuck it up and it’ll be like, “You can get up to $25,000 as a tax credit if you’re a veteran who owns a small business in an opportunity zone and have a low income but also somehow have a spouse who is a lawyer and can spend 30h finding and filling out the paperwork and tracking down bank statements from when you both were 19.”
On top of that just pumping support money into real estate doesn’t fix either of the core problems: people aren’t being paid enough to afford homes and we’re not building enough homes to keep prices reasonable. The end result of this is that home prices inflate even further. If we treated houses as housing rather than investment vehicles we could actually do something about our housing crisis.
This dude bureaucracys
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this will get all kinds of messed up. I had one of these years ago. It used to be you had to take a home ownership course. Had to earn under X amount and not have owned a home in the prior 9 years. You had I think 10 months to find house.
NOW you have to be of a specific demographic, the sum us larger. and yay need ti already be in close on the house. Which is nuts because if you are already in closing there’s a huge chance when you go to apply the funds are gone. Can’t afford the house. Before, the grants were limited/. But you knew before CLOSE that they were out of grands for the year.
Won’t help with high property values, high taxes, and unaffordable home insurance.
It will absolutely help with high property values. It will help them go higher. Same with student debt forgiveness.
For the record, I’m in favor of both
Yeah. Throw more money instead of punishing predatory lenders and speculators. Jesus.
The real solution is probably to build unfathomable quantities of publically owned housing and rent them out at affordable prices. I suspect this won’t meaningfully move the needle on the issue.
This can absolutely change people’s lives. Paying rent can make it impossible to save for a down payment. A 30k windfall (inheritance) helped my wife and I make the down payment on our first house. And then our mortgage payments were cheaper than our rent was. Even if the overall “sticker price” of a home is higher, it’s a negligible difference over the lifetime of a loan.
I’d rather they raise the cap on deductions (mortgage interest, state and local taxes) back to how it used to be Pre-Trump and give additional tax rebates to first time home buyers. His tax bill raised my effective tax rate a shitload. I would never have been able to buy my first house without those provisions.
The current cap really only affects rich people though.
How about this: crank up the taxes on houses people don’t live in. Make owning empty real estate so unprofitable that it’s better to rent it out cheap than to try to screw renters.
Make it a crime to own an empty house.
I want to see an exponential property tax so you could have a house and something like a small cabin somewhere but anything more and then your tax multiplier is based on how many properties you own, you’d have to control for businesses trying to own property in an employee’s name, this might even help with large chain businesses not becoming a monopoly but hard to say if that’s a huge benefit or a monkey paw type thing
Fwiw in Florida we have what’s called a homestead exemption. You get a big slice of your property value axed for taxation purposes if you live in the home. You have to pay full tax on any other properties. I believe tax rate increases are capped for homes with the exemption as well, but that might be for all homes. I don’t remember exactly.
How do they verify you live there?
You can only list one home as your permanent residence.
You can have 1 homestead. So you either live there or are paying full taxes elsewhere.
It also has to be your legal registered address.
It’s 50k it’s pretty much a joke based on property values. They could increase property tax and increase the exemption but it’s not going to happen
The plan to make housing affordable has been known for years, decades even.
You don’t cut prices, because it means cash-rich buyers will buy up the stock as investment in the long-term.
You don’t (only) give people money to buy, because you’re giving money to people that own property as a portfolio piece.
You:
- Freeze rent so that any increases fall below inflation, making it a long-term loss, but stable in the very short term.
- Provide opportunities for people to buy their rental properties, with tax incentives for those that sell at a cheaper rate.
- Freeze house prices and gradually drop over the long-term, so that they are a slowly depreciating asset.
- Assist those that wish to buy their rental properties.
This gives those that own multiple houses the means to sell property with a one-time tax benefit. You’ll lose money initially, but in the long term people can afford houses and the market will move on from property as an investment piece. The reason no one wants to do this is because it’ll take years to come to fruition, and most leadership terms aren’t that long.
You’re right this won’t help - all it will do is push up the average house price by 25k. Freezing prices won’t do anything except drive shortage and lower quality property. Everything you mentioned will work once until people realize they can take advantage of it. We’ve seen it before - price freezes don’t help.
It is well known what we need to do.
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make property a bad investment. Heavily tax vacant properties and ownership of multiple, improve renters rights, increase interest rates for investment purchases. The goal is to drive down Qd quickly, reducing the value of other owned properties.
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significantly drive up quality housing stock - Increase of Qs. Tax breaks for new builds, government rent to own, density and infrastructure increases. No tax on new builds owned for 10 years. Longer plan that solves long term.
Haha, I realised that I forgot the last point!
You’re right, freezing won’t stop it, because it’s still a stable place to keep your money. What needs to happen once frozen is that prices need to be continually dropped over a long period.
Obviously, more housing is key, and helps push current owners towards selling sooner rather than later. The problem with housing stock, which we’ve seen in the UK and Ireland, is that the quality of “affordable” housing stock is often hilariously bad. Corners are cut, homes are too hot/cold to be considered safe, and issues like cladding that breaks the law is pushed back to the owner to fix instead of those that broke the law. That’s why it needs to be gradual and methodological.
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That sounds like an incredibly horrible idea with tons of unintended consequences. I hope almost nothing less than a Trump presidency, so I hope this is not a sign of things to expect from her campaign.
Then again, people are dumb, so if this somehow convinces them to vote for her instead of the orange catastrophe, it might be fine.
Then again, people are dumb
The irony is palpable.
What a great comment! Well done you, I am proud of you!
Yeah, that money should be going to oil, automotive, and banking/finance oligopolies like the rest of the trillions are!
Having experienced this kind of policy in Australia; it’s great in theory - but the issue is that builders/sellers just ended up jacking up the prices of their homes to absorb the grant.
It’s the reason colleges here are stupid expensive as well. Greed.
Yup, this is just going to put an extra $25k from every sale into the builders’ pockets.
Ya’ll are getting newly built homes?
It still shifts the balance of power in favour of first time home buyers. Landlord fucks have to pay extra.
What’s the exact policy in Australia?
It varies a bit by state, but it usually only applies to new builds now: https://firsthome.gov.au/
I don’t think this is possible. First time home buyers aren’t buying in cash. They have to get bank loans and banks won’t loan if the appraisal doesn’t match the buying price.
Obviously I don’t know Australian law but at least in Texas this would prevent the house from closing.
Watched the same thing happen on a smaller scale back when analog TV broadcasting was phased out and we got vouchers for digital TV tuners in America. They all cost around $25 or less. As soon as the vouchers were given out, the prices doubled to $50
Surely this is a well studied phenomenon with a name, right?
Pretty sure this is inflation
No. Inflation is a general increase in price/decrease in buying power per dollar. This is specifically about one class of item increasing in cost to absorb a government subsidy, especially when that subsidy was meant to alleviate a cost to the citizen.
They should give lower interest rates to those with less means instead of the other way around.
Let me preface this with:
I am 100% on board with treating housing as a human right, but this proposal misunderstands the point of interest rates.
Interest rates are a best guess by financial institutions about your likelihood to repay and their expectations for inflation over the course of the loan. Interests rates are higher for poorer people because the risk of them not paying it back is higher. Google the “sub prime lending crisis” which is exactly what crashed the global economy in 2009.
One other commenter notes that an alternative would be to build state owned housing and rent it at reasonable rates. Unless it’s mixed income housing, that model has failed everywhere it had been tried-- from Cabrini Green in Chicago to the commie blocks of eastern Europe. Why? because it creates specific areas in a city where a business is essentially guaranteed to have less revenue than anywhere else. This is why urban centers have food desserts and why people who live in the massive public housing blocks in Coney Island have to commute 90 minutes to Manhattan – why would you open your business in a poor neighborhood rather than the financial district?
Even with the mixed-income model popular across Scandinavia and the Netherlands, it’s not like they solved the housing crisis as this does nothing from stopping the investment properties and the airbnb-ifcation of city Centers.
Here’s a congressional report on how increases to student grants (Pell grants) are highly correlated with increases in tuition.
https://crsreports.congress.gov/product/pdf/R/R43692/4
Again, I think everyone should be able to afford a home, but this policy is as ignorant of history as it is ineffective at addressing the root cause of the housing crisis.
I understand your point, however it’s flawed from the start in that government interest rates should not be used for a means of risk assessment, in my opinion. Your argument makes sense for private institutions. Bank loads should follow your logic. The government, however, should use interest rates to funnel new money where it’s needed most, and not towards private investors.
I agree with the platitude, but subsidizing interest isn’t giving money to poor people-- it’s cutting a check to a bank, using tax money that rich people avoid paying. If you want to increase the supply of cheap houses, you have to build cheap houses. If you want to lower the price of housing, artificially injecting a bunch of money into a market is going to raise demand and do nothing for the supply. Nevermind that in the US in particular, the problems exacerbated by a massive demographic shift towards dense urban centers that were not bombed out and rebuilt in the mid 20th century and therefore do not have housing stock appropriate for the lifestyles of today.
You also ignored the comment that subsidized interest is already an existing thing in the US and that the last time they tried giving houses to poor people that they could not afford to maintain, it crashed the global economy and was the single greatest wealth transfer towards hedge funds in history. NYC’s newest policy (after moving away from the structural failure of consolidated public housing) is that all new construction must have a certain number of low income, middle income, and high income units. That’s an actual supply side solution and the ratios and income thresholds are determined by the already existing demographics of the neighborhood as a way to fight both gentrification and white flight.
I’d be happy to have an actual policy discussion rooted in facts, but you can’t wave your hand over a stack of tax revenue and solve structural problems about housing stock, centuries of segregation, and the horrors of capitalism simply by wishing it away. There’s a lot of actual work to be done, and some of that might mean replacing historical housing districts with high density, mixed income developments. But that won’t ever happen, because the generations before us relied on home ownership as an investment vehicle for retirement and have spent decades campaigning against stuff like public transit, low income housing, and the existence of homeless people anywhere near them.
Feel free to diagree, but I’d rather give my money to a homeless person directly than subsidize the actuarial risk of a billion dollar investment bank via the coervice use of state violence if I decided not to pay my taxes.
Like, if you can’t come up with 3% of the value of a house (the down payment standard for subsidized homeowners in the US) how are you supposed to repair a roof or replace a major appliance? More government grants? From what revenue?
if the proposal is to disposses all the property owned by billionaires and use that to fund a reimagining of our cities such that they’re built for people and not cars, I’m game. If your idea is to raise taxes on working people to subsidize other working people while the banks, the construction firms, and every material vendor takes a profit, then fuck that.
Most of Sweden’s housing is owned by local governments (kommun in Swedish), but it’s also a 5 year wait list to get anything, impossible for immigrants/students to find anything because they don’t qualify for the queue immediately, and tied to a specific place. So, if you get a better job somewhere else, you’re still fucked because you would have needed to get on their queue 5 years ago or pay the inflated “market” rent because the supply of non-state-owned housing is so low. Denmark and the Netherlands have the same problem, but perhaps that’s more understandable considering their absolute size and population density.
As a side point, are you aware that the government has relied on deficit spending for more than a decade and that every new dollar spent is a dollar + interest that must be paid back to an investment fund?
For example, every time you ride the subway in NYC, you’re paying something like $.30 to Chase bank to service debt the MTA used to renovate the system in the 70s.
I guess my issue is imagining private banks being bypassed, but it seems you’re saying that isn’t a thing in the real world.
Agreed, instead of paying for some of it, enforce a strict 3% interest rate (with the remaining amount being paid for by the gov), this prevents the base cost of the home being raised by the amount of the subsidy
