Laurie Macfarlane said:Over the past five decades ... [t]axes on land and property have been removed, and subsidies for homeownership introduced. The deregulation of the mortgage credit market in the 1980s meant that banks quickly became hooked on mortgage lending ... Rent controls were abolished, and the private rental market was deregulated.
The result has been an unprecedented house price boom. Since 1995, skyrocketing house prices have increased value of Britain’s housing stock by over £5 trillion – accounting for three quarters of all household wealth accumulated over the same period. While this has been great news for property owners, it has been disastrous for tenants...
The trillions of pounds of wealth amassed through the British housing market has mostly been gained at the expense of current and future generations who don’t own property, who will see more of their incomes eaten up by higher rents and larger mortgage payments.
Germany has among the strongest tenant protection laws in Europe, and many German cities also impose rent controls. This, along with a banking sector that favours real economy lending over property lending, means that Germany has not experienced the rampant house price inflation that the UK has. Remarkably, the house price-to-income ratio is lower in Germany today than it was in 1995, while in the UK it has nearly tripled over the same time period. The fact that houses are not lucrative financial assets, and renting is more secure and affordable, means that the majority of people choose to rent rather than own a home in Germany – and therefore do not own any property wealth.
...
So while German property owners have not benefited from skyrocketing house prices in the way that they have in Britain, the flipside is that German renters only spend 25% of their incomes on rent on average, while British renters spend 40%
As you've probably read I've posted a lot of threads on housing lately, and I wanted to look at another example and compare with another country that has gone a different route. I want to look at Britain, which like the US deregulated its financial markets and saw rising homeownership. I want to look at the effects of that and compare it to another country which went in a very different direction.
https://evonomics.com/wealth-power-productivity-laurie-macfarlane/
Sounds much like the US in the 1980s and 1990s before the housing bubble, right? So what happened there?
It looks like they've had mostly the same effects that we did. Home price appreciation was great for those who owned property, but for those who either did not buy or were too young to have done so, they now face higher rents that take up large chunks of income, 33% is the standard (which is the brink of unaffordable according to government agencies), while 50% has become common. So what would have happened had we gone in another direction? What if we didn't deregulate finance? What if we had strong rent control? Would it have been disastrous, as so many pundits have predicted?
Hmm, it sure doesn't look like ruin and starvation to me. Germany actually looks like it's doing quite well. Germany also had among the best recovery from the financial crisis:
View attachment 67249976
So why can't we have a system like this? It would benefit far more Americans than our current system while still allowing for a robust economy. Given the housing crisis that we have in the US, it's time for a change.
Are you aware that young Germans have long bitched constantly about the housing situation, which they claim is getting worse? Now part of this is because the young dont want to live rural, and they are bitching because they have such a hard time moving to the urban area that they want to go to, even the few who have money have to work at it because of the lack of availability of housing.
Average rent in Berlin is $1384. In Manhattan it's more than $4000.
As you've probably read I've posted a lot of threads on housing lately, and I wanted to look at another example and compare with another country that has gone a different route. I want to look at Britain, which like the US deregulated its financial markets and saw rising homeownership. I want to look at the effects of that and compare it to another country which went in a very different direction.
https://evonomics.com/wealth-power-productivity-laurie-macfarlane/
Sounds much like the US in the 1980s and 1990s before the housing bubble, right? So what happened there?
It looks like they've had mostly the same effects that we did. Home price appreciation was great for those who owned property, but for those who either did not buy or were too young to have done so, they now face higher rents that take up large chunks of income, 33% is the standard (which is the brink of unaffordable according to government agencies), while 50% has become common. So what would have happened had we gone in another direction? What if we didn't deregulate finance? What if we had strong rent control? Would it have been disastrous, as so many pundits have predicted?
Hmm, it sure doesn't look like ruin and starvation to me. Germany actually looks like it's doing quite well. Germany also had among the best recovery from the financial crisis:
View attachment 67249976
So why can't we have a system like this? It would benefit far more Americans than our current system while still allowing for a robust economy. Given the housing crisis that we have in the US, it's time for a change.
It's certainly different than US housing, but I'm not seeing why I'd prefer the US housing situation. They still pay far less than we do. It's not perfect, but I don't see where we do obviously better.Germany has its housing downsides as well - lack of affordable housing in urban areas. Of course, housing is much more affordable in rural areas of the US as well.
https://www.deutschland.de/en/topic/life/lifestyle-cuisine/housing-in-germany
I've spoken with people who have lived in Germany. Perhaps you should speak to more American youth.Maybe you should ask some actual GERMANS about it. They live in MATCHBOXES, unless they are very wealthy.
It's certainly different than US housing, but I'm not seeing why I'd prefer the US housing situation. They still pay far less than we do. It's not perfect, but I don't see where we do obviously better.
Sent from my phone. Instaurare omnia in Christo.
Sure, but overall I'm not seeing the misery that people claim we'll get if we limit speculation in housing or introduce rent control. Sure, it may be smaller, but they're spending a lot less than we do.I never claimed that we do better - I only pointed out that lower supply than demand causes housing costs to rise, and home size to fall, in urban areas in Germany as well.
Sure, but overall I'm not seeing the misery that people claim we'll get if we limit speculation in housing or introduce rent control. Sure, it may be smaller, but they're spending a lot less than we do.
Sent from my phone. Instaurare omnia in Christo.
They're going to have to unless they want even more angry, voting Millennials.Property taxation is a huge source of state/local revenue - it may be quite hard to convince those in government to take any action to reduce their major funding sources.
I was wondering about that aspect. Seems like with the system outlined the incentive to build new homes wouldn't be very strong.Are you aware that young Germans have long bitched constantly about the housing situation, which they claim is getting worse? Now part of this is because the young dont want to live rural, and they are bitching because they have such a hard time moving to the urban area that they want to go to, even the few who have money have to work at it because of the lack of availability of housing.
I was wondering about that aspect. Seems like with the system outlined the incentive to build new homes wouldn't be very strong.
As you've probably read I've posted a lot of threads on housing lately, and I wanted to look at another example and compare with another country that has gone a different route. I want to look at Britain, which like the US deregulated its financial markets and saw rising homeownership. I want to look at the effects of that and compare it to another country which went in a very different direction.
https://evonomics.com/wealth-power-productivity-laurie-macfarlane/
Sounds much like the US in the 1980s and 1990s before the housing bubble, right? So what happened there?
It looks like they've had mostly the same effects that we did. Home price appreciation was great for those who owned property, but for those who either did not buy or were too young to have done so, they now face higher rents that take up large chunks of income, 33% is the standard (which is the brink of unaffordable according to government agencies), while 50% has become common. So what would have happened had we gone in another direction? What if we didn't deregulate finance? What if we had strong rent control? Would it have been disastrous, as so many pundits have predicted?
Hmm, it sure doesn't look like ruin and starvation to me. Germany actually looks like it's doing quite well. Germany also had among the best recovery from the financial crisis:
View attachment 67249976
So why can't we have a system like this? It would benefit far more Americans than our current system while still allowing for a robust economy. Given the housing crisis that we have in the US, it's time for a change.
I notice you're looking exclusively at the position of the property owner here. Tell me who faces more financial insecurity, the landlord or the tenant? Where is the tenant better off? Here or Germany? And where is the doom and gloom in Germany?German cities tend to have housing shortages. No surprise.
Berlin was the exception, but that’s changing.
Tell me, would you invest in housing if you couldn’t evict tenants? Germans can’t. People can squat in their residences”, failing to pay the rent for months, a year, 18-months.
People go bankrupt when they are saddled with free-loading scum.
As the property owner, you don’t have rights.
If you want housing to be affordable, build more of it... which means putting an end to the senseless bureaucratic BS... which Germany is also rife with. Believe me, as someone who spends gobs of time in Germany, I know their stifling bureaucracy. In fact, I profit handsomely from it.
Maybe you should ask some actual GERMANS about it. They live in MATCHBOXES, unless they are very wealthy.
I notice you're looking exclusively at the position of the property owner here. Tell me who faces more financial insecurity, the landlord or the tenant? Where is the tenant better off? Here or Germany? And where is the doom and gloom in Germany?
Sent from my phone. Instaurare omnia in Christo.
Those who rent properties have gone bankrupt due to renters not paying, and the renters being unable to evict these free loaders.
So, obviously the renter faces more financial insecurity because they must pay for their property despite the renter not paying his rent.
Tell me, what type of effect would that have on housing investment?
The housing problem will only get worse and worse and to those who say "yea but you can just move to cheaper areas".. hog wash. People are moving more and more to cities, and dont want to live in little hicksburg with 2000 people where half are your family. If you want that, then here in Spain you can buy a whole village for next to nothing if you want. Granted there is no internet and the roads might suck, but you got your own village!
I was just there. I saw houses, townhouses, city apartments ... all very similar in size to what we have in our own urban and suburban areas. The tour I was on included a very pleasant home visit with a German family. Housing and home costs are not their biggest gripes. Google 'german church taxes'.
There's less of it. Now tell me why that's a bad thing for the quality of life of Germans. How has massively more rental housing investment here helped the quality of life of Americans?
When there is not enough rentals, prices surge.
There is less of what?
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