Unfortunately I think its unrealistic to hope for something that doesn’t take profits into consideration as things stand now. Also, while I agree rents have gone FAAARRRRRR beyond any practical purposes, some people do forget “at cost” includes extra to cover maintenance and taxes.
some people do forget “at cost” includes extra to cover maintenance and taxes.
Taxes are a function of property value. One of the more ugly moral hazards of the last few decades has been municipal governments hungrily consuming the enormous tax windfalls of exploding property prices while residents are forced to pick up the tab for more and more privatized municipal services.
The same house jumping from $150k to $600k doesn’t translate into roads that are 4x nicer or drainage 4x better managed or schools 4x more well-funded. It just floods into the pockets of municipal cronies and private contractors, for mayoral vanity projects. Selling property “at-cost” would keep the tax rates down. But high ranking city officials don’t want cheap land in their city. That cuts into their slush funds.
So we see city officials tacitly encourage these exploding housing costs, while residents are priced out of homes they could have easily afforded even during the 2008 housing peak.
I dont disagree but that doesn’t change the fact that
A- taxes are a thing and therefore a cost that has to be factored in, and
B- Even if we fix the tax system it would still be a necessity.
Fixing broken systems is important and WOULD help people find housing, but arguing for utopia or bust is only going to let things get worse as you bicker about the details of municipal spending (which again I do agree on but we ALSO need to work within the system we have now to help people for whom this isn’t theoretical internet banter…)
A- taxes are a thing and therefore a cost that has to be factored in
I will spend less on Taxes + Mortgage for a house sold at-cost than on Mortgage alone on a house sold at a 4x markup.
B- Even if we fix the tax system it would still be a necessity.
The issue isn’t the tax system, its the incentives of public officials. When you can generate personal income off the professional tax base, via privatization, you are incentivized to behave as a corrupt bureaucrat. This leads to both higher housing prices (because you want more money with which to be corrupt) and more hostility towards those taxes (because you’re seeing the money go into the pockets of corrupt officials, rather than into the maintenance of community property).
arguing for utopia or bust is only going to let things get worse
I don’t think identifying moral hazard in a system is utopian. If anything, I think it is vital to reversing negative trends. If you can’t recognize why municipal officials would resist public housing and subsidize artificially high real estate costs, you’re never going to see the path towards getting those corrupt officials out and reversing the trends.
If “the foxes have always guarded the hen house and asking for anything else is utopian” is your response… Idk, buddy. What do you think happens next?
Yimby: “We should build more houses to address the housing crisis.”
Leftist: “So people can live in them at-cost, right?”
Yimby: putting on his landlord hat
Leftist: “… Right?”
Didn’t know what a Yimby was, this link explained it very well for me!
Unfortunately I think its unrealistic to hope for something that doesn’t take profits into consideration as things stand now. Also, while I agree rents have gone FAAARRRRRR beyond any practical purposes, some people do forget “at cost” includes extra to cover maintenance and taxes.
Taxes are a function of property value. One of the more ugly moral hazards of the last few decades has been municipal governments hungrily consuming the enormous tax windfalls of exploding property prices while residents are forced to pick up the tab for more and more privatized municipal services.
The same house jumping from $150k to $600k doesn’t translate into roads that are 4x nicer or drainage 4x better managed or schools 4x more well-funded. It just floods into the pockets of municipal cronies and private contractors, for mayoral vanity projects. Selling property “at-cost” would keep the tax rates down. But high ranking city officials don’t want cheap land in their city. That cuts into their slush funds.
So we see city officials tacitly encourage these exploding housing costs, while residents are priced out of homes they could have easily afforded even during the 2008 housing peak.
I dont disagree but that doesn’t change the fact that A- taxes are a thing and therefore a cost that has to be factored in, and B- Even if we fix the tax system it would still be a necessity.
Fixing broken systems is important and WOULD help people find housing, but arguing for utopia or bust is only going to let things get worse as you bicker about the details of municipal spending (which again I do agree on but we ALSO need to work within the system we have now to help people for whom this isn’t theoretical internet banter…)
I will spend less on Taxes + Mortgage for a house sold at-cost than on Mortgage alone on a house sold at a 4x markup.
The issue isn’t the tax system, its the incentives of public officials. When you can generate personal income off the professional tax base, via privatization, you are incentivized to behave as a corrupt bureaucrat. This leads to both higher housing prices (because you want more money with which to be corrupt) and more hostility towards those taxes (because you’re seeing the money go into the pockets of corrupt officials, rather than into the maintenance of community property).
I don’t think identifying moral hazard in a system is utopian. If anything, I think it is vital to reversing negative trends. If you can’t recognize why municipal officials would resist public housing and subsidize artificially high real estate costs, you’re never going to see the path towards getting those corrupt officials out and reversing the trends.
If “the foxes have always guarded the hen house and asking for anything else is utopian” is your response… Idk, buddy. What do you think happens next?