Here is an excerpt, but the post is short, so please click the link if you're interested.
Understanding this value and the systematic returns that homes provide leads to a somewhat paradoxical conclusion that (1) homeownership is usually a good investment, and (2) the smaller the investment, the better. In other words, an owner-occupied home with a low rental value can be a great investment, but the downside is that it requires living in a home with a low rental value.
The various posts in this series have considered housing affordability with a focus on rent. This focus has led me to the following policy suggestions: we should (1) maintain relatively high property taxes, (2) reduce or eliminate income tax benefits of homeownership, including the non-taxability of the rental value of owned units, (3) eliminate urban supply constraints, (4) reduce regulatory barriers to mortgage lending, especially in low tier markets, and (5) encourage innovation in real estate markets that reduces transaction costs.
I hope you have found some interesting ideas in the series. I found it useful and enjoyable to systematically lay out a conceptual review of these ideas.
Here is a link to the whole series.
Hearty congratulations all around.
ReplyDeleteIf America's macroeconomist really want to raise living standards and fight inflation, they will start obsessing with housing shortages and not labor shortages.
Thanks, Ben.
DeleteThat was nice reading!
ReplyDeleteDo you retain copyright over the pieces? You could stick them all together on one page (and/or a pdf) and make it available for easy dissemination perhaps,
Thanks Matthias.
DeleteWe might do something like that.
This is from Fitch regarding housing affordability
ReplyDeletehttps://www.fitchratings.com/site/pr/10088550
They get some things right....as usual, I think far more focus needs to be paid to zoning....
Can I just say what a relief to find someone who actually knows what theyre talking about on the internet. You definitely know how to bring an issue to light and make it important. More people need to read this and understand this side of the story. I cant believe youre not more popular because you definitely have the gift.
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ReplyDeleteSomeone that does not want to cut grass would be more interested in a condominium or town house. The people with children or an expanding family would probably lean toward a split level, split foyer, 1.5 story, or 2 story. Especially if they need their own space.Senior Assisted Living Los Angeles
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