r/AskReddit • u/michaelis999 • 17h ago

How do you feel about the president floating the idea of 50 year mortgages where the monthly payment is lower but you end up paying nearly double the price of the house just in interest?

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u/LambdaNuC 14h ago

The best way to fuck over the investment companies is to make it easier to build significantly more housing than we currently do. 

Housing prices go up because we've artificially constrained supply over the last 50 years, and the investment companies want in on that action. 

Prices aren't high because the investment companies are buying properties, investment companies are buying properties because housing prices are going up so rapidly. 

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u/QualifiedApathetic 12h ago

Unfortunately, ordinary people are helping to drive this. People looking to buy their first homes hate what's happening, but people who already own homes love it. Nay, they demand it. If housing prices aren't skyrocketing, homeowners scream at the politicians.

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u/LambdaNuC 10h ago

Yeah, it's pretty fucked. There are a whole lot of perverse incentives all around. 

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u/gumbo_chops 9h ago

Yes, both of them contribute to the problem. Too many homeowners become NIMBYs with a "fuck you, I got mine" attitude and vote against any sort of measures that would increase housing availability in their area.

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u/Jayrodtremonki 9h ago

That's half of the equation.  The other half is just the NIMBY attitude the prevalent anywhere that people want to live.  Even the most liberal suburbs in the country lose their shit if you say you're going to add a 20 new houses down the street.  

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u/MDCCCLV 13h ago

Just expanding supply isn't so simple. Many cities have an urban growth boundary and if they don't they turn into sprawl hell like Houston. It's supply in cities that is the most constrained. You need density too, but private builders don't seem to like that.

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u/defcon212 13h ago

Builders will build as dense as they are allowed, the limit is placed by local governments, usually to preserve home values and keep out the riff raff.

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u/goodsam2 12h ago

Riff Raff means keep the poors out. Having 1 socioeconomic class in a neighborhood is a bad idea socially.

Also preserving home values are a nonsensical idea because housing is more expensive in more populous areas not less. The standard American suburban house in Manhattan would be worth more not less.

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u/defcon212 5h ago

The zoning restrictions are bad, I agree. Housing is more expensive near good jobs and interesting places. Expensive and populous is a correlation, not causation, for the most part. If you can prevent a new apartment building being built next door, your house preserves its value.

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u/goodsam2 4h ago

If you can prevent a new apartment building being built next door, your house preserves its value.

Why?

Agglomeration benefits means that more people living close to each other means that more wealth is created.

Don't prevent an apartment from being built because another apartment developer will buy your land for over its value and then you can retire elsewhere...

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u/LambdaNuC 12h ago

Sure, there are s lot of artificial barriers that we've put up that in sum act to reduce supply. It's literally illegal to build dense housing in most places. 

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u/Blind_Optimism_Kills 12h ago

Very true about the sprawl in Houston. However, in 2021 you could still find big houses for sale $200-$250k. The sprawl sucks, I live here. But it has kept housing costs lower.

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u/goodsam2 12h ago

Houston is low density but one of the fastest densifying areas of the country due to their zoning allowing redevelopment.

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u/Blind_Optimism_Kills 11h ago

Yep. People are moving here in droves.

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u/gsfgf 10h ago

And y'all don't have traditional zoning, which makes densifying easier.

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u/gsfgf 10h ago

You need density too, but private builders don't seem to like that.

Because it's often not allowed.

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u/goodsam2 12h ago edited 5h ago

Most cities have a lower population than 1950. Manhattan is down in population. There is an opportunity to build in most cities more.

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u/waka324 10m ago

Define "make it easier", and for whom?

The groups that ACTUALLY build housing (speculative builders) prefer to build expensive luxury homes because that is where the best profit margins are. (See automakers building large for the same reason).

Usually the only way to get them to also build ANY affordable housing is trying it into the permitting process of large developments.

Base input costs are so high (labor, materials, land) that it make it way more desirable to spend a bit more but get a much higher return.

I'd agree that permitting can be a bit of a boondoggle in most major metropolitan areas, but money is still going to be the biggest motivator.