• Posts
  • RSS
  • ◂◂RSS
  • Contact

  • Decoupling property values and rents

    July 26th, 2015
    housing, money, rent  [html]
    By and large people want higher property values and lower rents. If you're a homeowner you want your highly leveraged investment to appreciate and don't particularly care about other people being able to buy. If you're a renter you don't want your rent to go up, and ideally it would go down. Some renters are trying to buy [1] and they want property values to fall, but because most people spend much longer owning than trying to become owners this is a much smaller group.

    Unfortunately, higher property values go with higher rents, and lower property values with lower rents, so people are in opposition. How can we decouple them?

    Rent control is one way, but has downsides. If you push too hard people will just turn their properties from rentals into condos and owner-occupied houses. And if you want to have rent control be more than a temporary delay on rising rents then it can't reset to market when people move, which gives you several-year waits for apartments.

    Means-tested housing subsidies are another option. You can require developers to set aside units for people making X% of the poverty line, or the government can give housing vouchers to people who couldn't otherwise afford apartments. These programs are very expensive, though, enough that they're perpetually underfunded. This means most of the people who need the help can't get it, and those that do have very long waits first. We could just pay the full cost and expand, but when you commit the government to paying the difference between 30% of your income and the cost of housing, housing is going to get even more expensive.

    We do have another option here, though, one that can make property values go up while rents go down. We should make it easier for people to expand their houses. When people put in a dormer, finish a porch, or build an addition their property becomes more valuable, and having more available bedrooms reduces the upward pressure on rents. Homeowners win, landlords win, renters win, and our cities are healthier.


    [1] Current homeowners trying to buy a different house also want lower property values, but not by nearly as much since generally you sell one house to buy a new one and so they're exposed in both directions.

    Comment via: google plus, facebook

    Recent posts on blogs I like:

    Fireside Friday: January 1, 2021

    Happy New Year! Good riddance 2020! Fireside this week. Next week, we’ll be finishing up our look at the Dothraki of A Song of Ice and Fire and Game of Thrones by looking at how they are shown to fight and comparing that to the fighting patterns of actual…

    via A Collection of Unmitigated Pedantry January 1, 2021

    Streets Before Trust

    There’s an emerging mentality among left-wing urban planners in the US called “trust before streets.” It’s a terrible idea that should disappear, a culmination of about 50 or 60 years of learned helplessness in the American public sector. Too many people …

    via Pedestrian Observations January 1, 2021

    Systems design explains the world: volume 1

    "Systems design" is a branch of study that tries to find universal architectural patterns that are valid across disciplines. You might think that's not a possibility. Back in university, students used to tease the Systems Design Engineers, ca…

    via apenwarr December 29, 2020

    more     (via openring)


  • Posts
  • RSS
  • ◂◂RSS
  • Contact