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While bureaucratic red tape exists, that is not what is holding up new housing. Planning departments & commissions routinely set rules such that a developer must come pleading to be allowed to build - only to be told that the only way to achieve a "yes" is if the developer does something completely unrelated to the development - say, establish a new park and pay for new bicycle lanes in a different part of the county altogether.
That's not red tape.
No, that's not red tape, that's extortion under the guise of bureaucratic red tape. Which is worse.
Quote:
Originally Posted by moguldreamer
ALL housing is affordable to the people who buy & rent. There is scant evidence of housing sitting vacant on the market because it is too expensive. The opposite is true: houses come on the market and sell within days or weeks in most locations.
Most second homes are in very expensive areas. In Ocean City (NJ) a 1 bedroom condo might be $250,000, a single family home would be over a million to start. The majority of homes are second homes. If the people who have them sell them, the buyers would be other rich people who want a second home there.
I don’t think most or even all are in very expensive areas. Others are the opposite and are in remote areas. People might own a cabin or rustic home. They are small, have fewer amenities than traditional homes, and wouldn’t provide people with access to things they need on a daily basis. Homes in more urban/vacation locations tend to be much smaller. A family might all squeeze into a two-bedroom condo, for example.
As for the person noting that housing is not expensive because people buy it, a lot of times the people who buy it are foreign investors. I know back in the day when my sister was looking in an expensive area, she would see homes go up for sale, be outbid, and then go back on the market for rental prices that weren’t enough enough to cover a mortgage. She said it was just foreign investors looking for a place to park their money.
According to various sources there are approximately 7.5 million second homes owned in the United States representing approximately 5.5% of the total housing stock in 2018.
Many second home owners are holding onto their homes right now even tighter than in the past preferring to pass them onto their heirs (often as tax-free gains) as opposed to paying huge federal, and in many cases state, capital gains taxes if they were to sell them today.
Perhaps a solution to the housing shortage lies in a tax solution. Allow second home owners the opportunity to sell their second home using the same tax exemption they would receive on their primary residence providing they have owned it a minimum of 5 years. That would allow a single person to sell their second/vacation home and receive a $250,000 exemption from both federal and state capital gains. For a married couple the exemption would be $500,000.
This could significantly immediately increase the inventory of available homes and potentially put the brakes on rapid price appreciation and possibly even reduce prices in many markets.
Strangely, I think this idea will accomplish exactly the opposite!
Why?
Because second homes will be much more attractive to own!
With inflation and riskier volatile financial markets gaining steam, more UNTAXED RE gains will be irresistible to the moneyed folks.. and I mean ordinary middleclass millionaires, who will gobble up MORE second properties as wealth hedges and portfolio balancers!
So the housing stock will be further stressed for first time home buyers who can hardly afford entry NOW and.. well you get the picture, right?
Second worst idea I've seen on CD.
Last edited by PamelaIamela; 03-25-2022 at 09:42 AM..
While bureaucratic red tape exists, that is not what is holding up new housing. Planning departments & commissions routinely set rules such that a developer must come pleading to be allowed to build - only to be told that the only way to achieve a "yes" is if the developer does something completely unrelated to the development - say, establish a new park and pay for new bicycle lanes in a different part of the county altogether.
That's not red tape.
ALL housing is affordable to the people who buy & rent. There is scant evidence of housing sitting vacant on the market because it is too expensive. The opposite is true: houses come on the market and sell within days or weeks in most locations.
Unchecked building can do real damage to budgets and schools if it happens too quickly. In the large school district I worked in about 15 years ago, they had a period of huge growth to the point that they had to bring in trailers because the schools had too many kids enrolling in too short a time. So they put a moratorium on building anything other than over-55 communities. There are other reasons a town might need to curb growth so that it doesn't exceed infrastructure capacities.
Unchecked building can do real damage to budgets and schools if it happens too quickly. In the large school district I worked in about 15 years ago, they had a period of huge growth to the point that they had to bring in trailers because the schools had too many kids enrolling in too short a time. So they put a moratorium on building anything other than over-55 communities. There are other reasons a town might need to curb growth so that it doesn't exceed infrastructure capacities.
If the government can't keep up with population growth, it needs to get out of the way so that someone else can.
I don’t think most or even all are in very expensive areas. Others are the opposite and are in remote areas. People might own a cabin or rustic home. They are small, have fewer amenities than traditional homes, and wouldn’t provide people with access to things they need on a daily basis. Homes in more urban/vacation locations tend to be much smaller. A family might all squeeze into a two-bedroom condo, for example.
As for the person noting that housing is not expensive because people buy it, a lot of times the people who buy it are foreign investors. I know back in the day when my sister was looking in an expensive area, she would see homes go up for sale, be outbid, and then go back on the market for rental prices that weren’t enough enough to cover a mortgage. She said it was just foreign investors looking for a place to park their money.
Most people need to work, and have kids in schools. That's difficult to do when moving to a remote cabin somewhere. Plus I think you'd be surprised how expensive vacation homes in remote areas are, too. People usually buy second homes in popular places, even when in rural areas...places with good hunting, fishing, skiing, nice scenery, whatever. As such there is always going to be demand for second homes and that keeps the value high. People aren't buying second homes in undesirable areas.
I mean, maybe if you go to some remote Alaska town, but that's a solution few people are going to be able to make use of.
Here's a 2-bedroom remote cabin in Wyoming, for $375,000.
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