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Why Shouldn't Home Prices Go Down Over Time?

phattonez

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When we buy a car, the value immediately drops once we drive it. It continues to lose value over time. The same is true of computers. The same is true of just about all consumer goods that wear out. The only things that don't lose value are the things that don't degrade, like precious metals. So what is the deal with housing? Why has the cost of housing gone up faster than inflation? Houses degrade with time. A home built 30 years ago, without maintenance, is far less valuable than a home built brand new, so what's the deal?

The issue is land. Land becomes more scarce over time and thus increases in value. As it goes up, the owner now controls more wealth despite doing absolutely nothing to increase the wealth of society. What was worth $50,000 years ago can be worth $500,000 now simply because the land has become more valuable. Continued unimpeded, this leads to the problem we have today, where young people are delaying family formation and are spending more on housing costs than previous generations. This is terrible for society, as our young people remain mired in debt and land owners reap all of the benefits. It's not a good thing that a home costs about 10 years of income whereas in the past it was less than 7 years of income. How do we fix this?

My argument is the following:
1. Increase property taxes greatly on non-primary residences.
2. Eliminate property taxes entirely on primary residences.
3. Eliminate exemptions such as depreciation and maintenance that are currently used as subsidies for landlords.
4. Tax rental income above the rates of normal income.

This way, we establish real property ownership as a good thing. We favor family home ownership in the desire that all families will be able to live on property that they own. We also discourage speculation on land and viewing land as a means of production and generator of wealth. It is neither of these things, and experience has shown that this process, if continued unabated, will lead to only fewer and fewer people owning land and owning most of a country's wealth.

This proposal is entirely reasonable, fair to home owners, and punitive only to those who are getting wealthy through no work of their own. It will lead to a more prosperous, fairer society where people can mature, grow old, and do the real important work in life, which is to start their families and settle down.
 

markjs

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When we buy a car, the value immediately drops once we drive it. It continues to lose value over time. The same is true of computers. The same is true of just about all consumer goods that wear out. The only things that don't lose value are the things that don't degrade, like precious metals. So what is the deal with housing? Why has the cost of housing gone up faster than inflation? Houses degrade with time. A home built 30 years ago, without maintenance, is far less valuable than a home built brand new, so what's the deal?

The issue is land. Land becomes more scarce over time and thus increases in value. As it goes up, the owner now controls more wealth despite doing absolutely nothing to increase the wealth of society. What was worth $50,000 years ago can be worth $500,000 now simply because the land has become more valuable. Continued unimpeded, this leads to the problem we have today, where young people are delaying family formation and are spending more on housing costs than previous generations. This is terrible for society, as our young people remain mired in debt and land owners reap all of the benefits. It's not a good thing that a home costs about 10 years of income whereas in the past it was less than 7 years of income. How do we fix this?

My argument is the following:
1. Increase property taxes greatly on non-primary residences.
2. Eliminate property taxes entirely on primary residences.
3. Eliminate exemptions such as depreciation and maintenance that are currently used as subsidies for landlords.
4. Tax rental income above the rates of normal income.

This way, we establish real property ownership as a good thing. We favor family home ownership in the desire that all families will be able to live on property that they own. We also discourage speculation on land and viewing land as a means of production and generator of wealth. It is neither of these things, and experience has shown that this process, if continued unabated, will lead to only fewer and fewer people owning land and owning most of a country's wealth.

This proposal is entirely reasonable, fair to home owners, and punitive only to those who are getting wealthy through no work of their own. It will lead to a more prosperous, fairer society where people can mature, grow old, and do the real important work in life, which is to start their families and settle down.

Sounds somewhat reasonable to me actually.:shrug:
 

markjs

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Though IDK about entirely doing away with tax on a primary residence. Maybe the property tax itself, but some things, roads, police and fire, schools, have to pay for that somehow. You have to pay for such somehow, but I definitely think there's merit in shifting more of that burden to luxury properties and business properties.
 

phattonez

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Though IDK about entirely doing away with tax on a primary residence. Maybe the property tax itself, but some things, roads, police and fire, schools, have to pay for that somehow. You have to pay for such somehow, but I definitely think there's merit in shifting more of that burden to luxury properties and business properties.
Gas taxes, sales taxes, etc. can pay for those.

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Grokmaster

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When we buy a car, the value immediately drops once we drive it. It continues to lose value over time. The same is true of computers. The same is true of just about all consumer goods that wear out. The only things that don't lose value are the things that don't degrade, like precious metals. So what is the deal with housing? Why has the cost of housing gone up faster than inflation? Houses degrade with time. A home built 30 years ago, without maintenance, is far less valuable than a home built brand new, so what's the deal?

The issue is land. Land becomes more scarce over time and thus increases in value. As it goes up, the owner now controls more wealth despite doing absolutely nothing to increase the wealth of society. What was worth $50,000 years ago can be worth $500,000 now simply because the land has become more valuable. Continued unimpeded, this leads to the problem we have today, where young people are delaying family formation and are spending more on housing costs than previous generations. This is terrible for society, as our young people remain mired in debt and land owners reap all of the benefits. It's not a good thing that a home costs about 10 years of income whereas in the past it was less than 7 years of income. How do we fix this?

My argument is the following:
1. Increase property taxes greatly on non-primary residences.
2. Eliminate property taxes entirely on primary residences.
3. Eliminate exemptions such as depreciation and maintenance that are currently used as subsidies for landlords.
4. Tax rental income above the rates of normal income.

This way, we establish real property ownership as a good thing. We favor family home ownership in the desire that all families will be able to live on property that they own. We also discourage speculation on land and viewing land as a means of production and generator of wealth. It is neither of these things, and experience has shown that this process, if continued unabated, will lead to only fewer and fewer people owning land and owning most of a country's wealth.

This proposal is entirely reasonable, fair to home owners, and punitive only to those who are getting wealthy through no work of their own. It will lead to a more prosperous, fairer society where people can mature, grow old, and do the real important work in life, which is to start their families and settle down.

Because property appreciates, unless it's allowed to fall into total disrepair...then it would depreciate like everything else..
 

phattonez

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Because property appreciates, unless it's allowed to fall into total disrepair...then it would depreciate like everything else..
How does a patch of dirt appreciate? Why does a patch of dirt gain a massive value if a skyscraper is built next to it?

Sent from my HTC phone. Instaurare omnia in Christo.
 

Grokmaster

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How does a patch of dirt appreciate? Why does a patch of dirt gain a massive value if a skyscraper is built next to it?

Sent from my HTC phone. Instaurare omnia in Christo.

Because the more the population grows, the more valuable living space becomes, except for property/houses in CRAPPY AREAS. It's called "Supply and Demand".
 

phattonez

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Because the more the population grows, the more valuable living space becomes. It's called "Supply and Demand".
Yes, I made that point in the OP. I also stated that this makes people wealthy despite not doing anything. Do you think this isn't a problem?

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ttwtt78640

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How does a patch of dirt appreciate? Why does a patch of dirt gain a massive value if a skyscraper is built next to it?

Sent from my HTC phone. Instaurare omnia in Christo.

Supply and demand. The land supply in any given area is fixed yet the demand for it is not. Not all land goes up in value: for example, a dump or airport my go in next to it or the nearby factory may close.
 

Winchester

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How does a patch of dirt appreciate? Why does a patch of dirt gain a massive value if a skyscraper is built next to it?

Sent from my HTC phone. Instaurare omnia in Christo.

More demand, fixed supply of dirt.
 

phattonez

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Supply and demand. The land supply in any given area is fixed yet the demand for it is not. Not all land goes up in value: for example, a dump or airport my go in next to it or the nearby factory may close.
Again, I get it. I just fail to see why people should be getting rich for doing no work. If a freeway is built near my home and the property value goes up, so should collect that benefit? Me, or society?

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ttwtt78640

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Because property appreciates, unless it's allowed to fall into total disrepair...then it would depreciate like everything else..

The building on the property, unless a total wreck or unsuitable for the land's zoned purpose, is generally valued (and insured) at its replacement cost. Since the cost of building materials and labor generally increase over time then so does a building's replacement cost.
 

Winchester

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Read the OP. I'm not an ignoramus.

Sent from my HTC phone. Instaurare omnia in Christo.

So you asking how a patch of dirt appreciates in value was a rhetorical question? It sure didn't seem like it to me.
 

ttwtt78640

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Again, I get it. I just fail to see why people should be getting rich for doing no work. If a freeway is built near my home and the property value goes up, so should collect that benefit? Me, or society?

Sent from my HTC phone. Instaurare omnia in Christo.

Both - you benefit by being able to sell that property for more than you paid for it and society benefits because your property taxes which increased, based on your home's increased assessed value, allow for more public goods/services.
 

phattonez

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So you asking how a patch of dirt appreciates in value was a rhetorical question? It sure didn't seem like it to me.
My point is that it isn't the labor of the property owner that makes it increase in value in the example.

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phattonez

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Both - you benefit by being able to sell that property for more than you paid for it and society benefits because your property taxes which increased, based on your home's increased assessed value, allow for more public goods/services.
And why should I get any of that benefit? Why do I deserve it?

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Grokmaster

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Again, I get it. I just fail to see why people should be getting rich for doing no work. If a freeway is built near my home and the property value goes up, so should collect that benefit? Me, or society?

Sent from my HTC phone. Instaurare omnia in Christo.

Investments can generate income = making your money work FOR YOU, Comrade.
 

Winchester

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My argument is the following:
1. Increase property taxes greatly on non-primary residences.
2. Eliminate property taxes entirely on primary residences.
3. Eliminate exemptions such as depreciation and maintenance that are currently used as subsidies for landlords.
4. Tax rental income above the rates of normal income.

1. Is fine if you are taxing secondary residences.
2. Opposed to on principle as all people ought to pay for the public services in their local, no free rides.
3. Depreciation, maybe could go along with that, out of pocket costs such as maintenance, no. Will raise costs to renters.
4. Opposed to on principle, income is income is income, no special rates or punitive rated depending on type. Also would raise costs to renters.
 

phattonez

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Investments can generate income = making your money work FOR YOU, Comrade.
So I didn't make society wealthier, but I benefit from doing nothing.

There's a vast world out there. It's not a binary choice of capitalism vs communism.

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ttwtt78640

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And why should I get any of that benefit? Why do I deserve it?

Sent from my HTC phone. Instaurare omnia in Christo.

If for no other reason, simply to reward you for paying more taxes to benefit society. After all, its not likely that your income went up as much as the assessed value of your home did.
 

phattonez

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1. Is fine if you are taxing secondary residences.
2. Opposed to on principle as all people ought to pay for the public services in their local, no free rides.
3. Depreciation, maybe could go along with that, out of pocket costs such as maintenance, no. Will raise costs to renters.
4. Opposed to on principle, income is income is income, no special rates or punitive rated depending on type. Also would raise costs to renters.
I'm going to look at point 4. Why should someone working a factory job pay the same tax rate as someone who inherited that factory and doesn't do anything?

Sent from my HTC phone. Instaurare omnia in Christo.
 

phattonez

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If for no other reason, simply to reward you for paying more taxes to benefit society. After all, its not likely that your income went up as much as the assessed value of your home did.
Exactly. I would only benefit if I sold the place. This is one reason why I want no taxes for primary residences.

Sent from my HTC phone. Instaurare omnia in Christo.
 

dobieg

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When we buy a car, the value immediately drops once we drive it. It continues to lose value over time. The same is true of computers. The same is true of just about all consumer goods that wear out. The only things that don't lose value are the things that don't degrade, like precious metals. So what is the deal with housing? Why has the cost of housing gone up faster than inflation? Houses degrade with time. A home built 30 years ago, without maintenance, is far less valuable than a home built brand new, so what's the deal?

The issue is land. Land becomes more scarce over time and thus increases in value. As it goes up, the owner now controls more wealth despite doing absolutely nothing to increase the wealth of society. What was worth $50,000 years ago can be worth $500,000 now simply because the land has become more valuable. Continued unimpeded, this leads to the problem we have today, where young people are delaying family formation and are spending more on housing costs than previous generations. This is terrible for society, as our young people remain mired in debt and land owners reap all of the benefits. It's not a good thing that a home costs about 10 years of income whereas in the past it was less than 7 years of income. How do we fix this?

My argument is the following:
1. Increase property taxes greatly on non-primary residences.
2. Eliminate property taxes entirely on primary residences.
3. Eliminate exemptions such as depreciation and maintenance that are currently used as subsidies for landlords.
4. Tax rental income above the rates of normal income.

This way, we establish real property ownership as a good thing. We favor family home ownership in the desire that all families will be able to live on property that they own. We also discourage speculation on land and viewing land as a means of production and generator of wealth. It is neither of these things, and experience has shown that this process, if continued unabated, will lead to only fewer and fewer people owning land and owning most of a country's wealth.

This proposal is entirely reasonable, fair to home owners, and punitive only to those who are getting wealthy through no work of their own. It will lead to a more prosperous, fairer society where people can mature, grow old, and do the real important work in life, which is to start their families and settle down.



Bud, the problems in your state aren't the problems with the rest of the country. Outside of your bubble, there are numerous states where the overwhelming majority of land is owned by homeowners with acreage. If your state has problems with land speculators, deal with it in your state and leave the rest of us alone.
 

phattonez

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Bud, the problems in your state aren't the problems with the rest of the country. Outside of your bubble, there are numerous states where the overwhelming majority of land is owned by homeowners with acreage. If your state has problems with land speculators, deal with it in your state and leave the rest of us alone.
You think you're exempt? You're not going to be lightly populated forever.

Sent from my HTC phone. Instaurare omnia in Christo.
 
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