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In this thread I learned that people can’t afford to live in the overcrowded metros where millions of people live everyday.
Also, people should be able to live in the elite big cities that are super desireable without having desireable job skills and without themselves being elite.
You're saying that because prices are "too high" (and what is the objective measurement we're using to determine what's "too high" or OK? Your subjective opinion on the matter, that's all) there's this huge problem and "something" must be done. Something other than to simply allow free market forces to work, of course... it would be awful for some people to move away, and for others to not move in, right? There's no chance that if prices actually are "too high" that a contraction of the workforce will act to reduce demand and therefore prices? Or that a constant demand against a shrinking workforce will result in increased wages?
There are many places I cannot afford to live. That isn't some great injustice. I just have to choose to live where I can afford it. It isn't my place to demand that a certain area needs me so much that it must find a way to accommodate me. Even if I'm right, why not just go somewhere else and let that area take it's lumps until it learns the hard way and lures me back with more money or lower prices?
These things always work themselves out... unless those who firmly believe they know better take the reins and start yanking and sawing in a pointless effort to redirect the natural course of events. They always fail, and they always cause more misery than would have existed otherwise. Sure, you can point at a few who reap a benefit from rent control or artificially-inflated wages, but you have to ignore the many more who are hurt by increased scarcity or prices.
You very literally have no point, except that you have an opinion and you're upset that the rest of the world doesn't share it.
The market is not interested in lowering prices, as investment into real estate makes money for the investors.
If they could no longer profit from owning real estate, flipping homes, and raising prices, would it not be better as no demand and supply would be the driving forces for people who want to live in a certain area.
Ahhh so now the "normal people cannot afford to live in major cities" is being spun into vague reference to economically active places for young people trying to start a career. The Winterfall-Shuffle.
"Normal people cannot afford to live in major cities" is now proven by owing versus renting in Manhattan. The Winterfall-Shuffle.
"Normal people cannot afford to live in major cities" is proven by prices rising in Sunbelt cities? The Winterfall-Shuffle.
Obviously you are incapable of supporting what you said about normal people in major cities, you fail and you give three more examples of what other poster were referring to when they said you sidestep being able to stand up for any argument you try to make.
People are being priced out of major cities. It’s not like 50 years ago when it was affordable for everyone, now they are becoming gilded areas for those with the proper white collar job.
Would it not be preferable to let demand and supply operate by who wants to live in the area, rather than inflate prices by investors who are looking to make money off of flipping homes, owning high end real estate they’ll never live in, and making money off of zero labor?
Edit: and the point was rent vs. buying, it was pointing out that if two people can live in NYC, one owning an apartment in manhattan, the other renting one in the Bronx, they are not having the same benefits/opportunities of living in supposedly the same city.
The market is not interested in lowering prices, as investment into real estate makes money for the investors.
If they could no longer profit from owning real estate, flipping homes, and raising prices, would it not be better as no demand and supply would be the driving forces for people who want to live in a certain area.
If more people want to live in an area, demand goes up, followed by increased prices as some folks are willing to pay more than others to live in a certain area. Unless of course, someone starts building new homes for the increased demand, but that's often difficult due to regulatory restraints, geographical constraints, or a lack of people willing to sell their property for redevelopment. How does you capital gains tax proposal increase the supply of housing to meet demand?
Quote:
Originally Posted by Winterfall8324
People are being priced out of major cities. It’s not like 50 years ago when it was affordable for everyone, now they are becoming gilded areas for those with the proper white collar job.
Would it not be preferable to let demand and supply operate by who wants to live in the area, rather than inflate prices by investors who are looking to make money off of flipping homes, owning high end real estate they’ll never live in, and making money off of zero labor?
Edit: and the point was rent vs. buying, it was pointing out that if two people can live in NYC, one owning an apartment in manhattan, the other renting one in the Bronx, they are not having the same benefits/opportunities of living in supposedly the same city.
You clearly fail to understand supply and demand. The investors can only make money on real estate if there is demand for the properties they own. If there's no demand, there's no increase in prices, and the investors don't make any money. This was what happened in Houston in the mid-80's, where my parent's house dropped in value from the $94,000 they paid to a low of $70,000. This was due to a complete lack of demand, as the oil industry issues caused major job losses. Investors do not drive pricing, demand does. And increasing demand results in increasing prices unless supply catches up.
In broad terms I'm pretty sure no first world economy taxes long term capital gains at the same level at ordinary income. Many of the better and best economies don't tax capital gains at all under most circumstances - Switzerland, Korea, Belgium, The Netherlands and several more.
Conceptually taxes on capital gains are a tax on savings and that is always bad. For a long time The US has had exceptionally high capital gains rates.
Capital gains taxes are bad for several key reasons
1). CG impose double taxation literally.
2). CG taxes often result in astonishingly unfair outcomes.
3). CG accounting is very complicated and costly. I'm in oil and gas trust me on this.
4). CG taxes don't raise much money.
5). CG taxes encourage cheating.
6). CG taxes distort optimal savings and investment strategies.
If more people want to live in an area, demand goes up, followed by increased prices as some folks are willing to pay more than others to live in a certain area. Unless of course, someone starts building new homes for the increased demand, but that's often difficult due to regulatory restraints, geographical constraints, or a lack of people willing to sell their property for redevelopment. How does you capital gains tax proposal increase the supply of housing to meet demand?
You clearly fail to understand supply and demand. The investors can only make money on real estate if there is demand for the properties they own. If there's no demand, there's no increase in prices, and the investors don't make any money. This was what happened in Houston in the mid-80's, where my parent's house dropped in value from the $94,000 they paid to a low of $70,000. This was due to a complete lack of demand, as the oil industry issues caused major job losses. Investors do not drive pricing, demand does. And increasing demand results in increasing prices unless supply catches up.
1. Investors shouldn't make money off of rising house prices
2. You just admit here that supply/demand rules that rise housing prices precede corporate investment, which means the latter is not necessary for the former to exist
3. Corporate investment drives demand, unless new development is built, demand won't grow to live in a certain area, that means the investors have control over the original demand.
If you take away profit from flipping and investing in homes, the demand will come solely from people who want to live there, not from people looking to make a buck.
1. Investors shouldn't make money off of rising house prices
2. You just admit here that supply/demand rules that rise housing prices precede corporate investment, which means the latter is not necessary for the former to exist
3. Corporate investment drives demand, unless new development is built, demand won't grow to live in a certain area, that means the investors have control over the original demand.
If you take away profit from flipping and investing in homes, the demand will come solely from people who want to live there, not from people looking to make a buck.
Why shouldn't investors make money off of rising house prices? You haven't given a decent reason yet why that's bad. You just spout stupid crap from anarcho-Marxist theory pieces you've read, most likely without spending any time being critical.
Your statements 2 and 3 contradict each other. Demand generally exists independent of corporate investing. I am pretty certain that corporate investors seldom spend their money unless there is organic demand to justify the investment. There are numerous failed real estate projects in California and Nevada that demonstrate this - they built it, and no one came. However, when demand exists, corporate investment is generally the only way to increase supply. There's no way Houston would add 10,000+ houses per year without corporate investment, especially since government here doesn't spend money to provide infrastructure for new subdivisions. The infrastructure must be built by the developers.
Profit from home flipping exists because most folks want to buy a home that is ready to move in. The flippers buy a house that requires renovation or remodeling, and bring it up to a standard that suits potential buyers. Under your fallacious thinking, all buyers would have to take care of the renovations and updates themselves. Of course, you also ignore the fact that house flipping isn't as common as you think.
Most investor owned homes are rented to people who, for whatever reason, don't want to own a home. The investors get a return on their capital, and the renters get what they want.
Why shouldn't investors make money off of rising house prices? You haven't given a decent reason yet why that's bad. You just spout stupid crap from anarcho-Marxist theory pieces you've read, most likely without spending any time being critical.
Your statements 2 and 3 contradict each other. Demand generally exists independent of corporate investing. I am pretty certain that corporate investors seldom spend their money unless there is organic demand to justify the investment. There are numerous failed real estate projects in California and Nevada that demonstrate this - they built it, and no one came. However, when demand exists, corporate investment is generally the only way to increase supply. There's no way Houston would add 10,000+ houses per year without corporate investment, especially since government here doesn't spend money to provide infrastructure for new subdivisions. The infrastructure must be built by the developers.
Profit from home flipping exists because most folks want to buy a home that is ready to move in. The flippers buy a house that requires renovation or remodeling, and bring it up to a standard that suits potential buyers. Under your fallacious thinking, all buyers would have to take care of the renovations and updates themselves. Of course, you also ignore the fact that house flipping isn't as common as you think.
Most investor owned homes are rented to people who, for whatever reason, don't want to own a home. The investors get a return on their capital, and the renters get what they want.
You can't honestly believe this. When investors choose to invest in high end real-estate, demand goes up, it is not just a provider of supply, as profit is the main motivator.
And when demand is determined for housing by motivations besides living there, like making money, storing money in the housing market, flipping homes, distort the demand that does exist.
I don't invest in the stock market and neither should you, it puts economic well being in danger and makes you a slave to the value of the corporate sector and leads you to support destructive public policy to save the wealth you have locked up in the market.
If taxes were raised to 90% 401ks and other investment tools would become less attractive and production/economic activity will become less inflated by capital investment and greed.
When you buy a stock, you are investing in a business.
When you start a business, you do so to make money. When you loan money to that business (buying its stock), you also do so to make money.
When people get jobs at that business, they do so to make money.
The workers at those businesses take the money they got from the jobs and buy washers and dryers, food, health care, electronics, pet food, and everything else they need (or want and can afford).
Because those workers bought washers & dryers, the owners of those businesses could pay their employees, who in turn took their paychecks and bought products and services.
All of that comes from the guy who started the business, and the money that was loaned to him to start or run the business (either direct loans or through the purchase of his stock).
If you shut down one, you shut down all the others.
Back to economics 101 class for you!
Business isn't a bad thing. It was conducted way back when humans were just starting to record history in writing, if the govt allowed it. You start a business to make money (a way to support your needs), and you do so to fill a need in the community. It's a win-win. People in the community can get their horses shoed by the local blacksmith, and the blacksmith can provide for his own needs by performing the service. That's what business is. That way, people don't have to become experts on everything. You can hire a plumber instead of trying to learn how to replace all the piping going to your house. You, in turn, are hired for YOUR expertise in something. I don't know of a better system.
Loaning money to a business by buying its stock is a good thing. It can be distorted and abused by the digital things going on these days. Before digital investing, there was no day trading like now. It was costly to buy and sell stocks, as well as taking time. Now, computer do it in seconds at low cost. Algorithms are used, which screws the market up, is my understanding. And mutual funds and institutions that buy and sell large amounts at a time can really screw up the market. So there are some disturbing things, but taxing capital gains at a low rate is not one of them.
People wouldn't invest, if most of their profits were taken away. That would kill the market, which would hurt business. There goes your job. How do you plan to provide for your own needs?
Last edited by bpollen; 01-26-2019 at 04:11 PM..
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