Huh. 15% of all apartments in the county are affordable. Fascinating. That seems like a lot, but every time I do the math it comes up to not nearly enough.
Sorry, trying to condense complex social issues into one sarcastic sentence never works well.
15% of Apartments are categorised as 'affordable', I'm guessing that at least 30% of people who would like to buy a home would only be able to purchase an affordable home. So all of those people who don't get lucky then have to rent, which costs more on a month-to-month basis than paying off a mortgage on a property which you actually own. It's a backwards set-up which ensures that the less well off are throwing their money into the pockets of the well off landlords.
Maybe. There are a bunch of variables, and I've gotten different results (widely) with different premises. I don't like it when that happens. It makes me itch.
I am, though, going to go against the grain and say that while having a safe affordable place to live is a fundamental right, that owning is not. I'm less interested in using government to ensure everyone can own a place than I am in making sure everyone has a place.
The ability to accumulate capital by keeping all non-essential expenses below a certain threshold of your income (in other words, "the ability to choose to better your economic prospects") ... is that a right? I remember something about "the pursuit of happiness," but I don't know if it should apply.
Because the rent feedback cycle Brian talks about has consequences on the flow of capital.
Maybe, and I think that's part of keeping rent affordable, defined largely as less than 30% of your gross. Preferably under 25%. So long as rent is below the 30% measure, you can still amass wealth. Not easily until you hit like 20%.
(I did a little research on this, and will happily share. I'm about to go run, and then there's chores and crap, so I'm mostly gonna disappear.)
But, yeah, my conjecture is paying rent does not mean not amassing wealth. You can do both, and a mortgage is not the only (not even really the primary!) vehicle to amass wealth. At least, sitting from my rent paying never planning to own perspective.
Well ... median family portfolio of equities is <$50K. Median family equity in real estate is >$200K.
I don't dispute that people could build wealth in other ways, but it doesn't seem that, by and large, they are. I'm quite sure I don't understand all the reasons behind that.
Definitely that. Also, I suspect there's a benefit to the fact that the money spent monthly servicing interest on that loan is pulling double duty in that it obviates the need to pay rent.
Yeah. I agree with you that there's no inherent right to own a home, but I do feel that people have a right to equal access to the financial benefits that are (right now) inextricably linked to home ownership.
Correct. Nor will I need to mow the lawn, repair a house, and the myriad of chores and headaches that come along with home ownership. For me, its a fair bargain and choice made. For others, it is the only option, and that ain't cool.
It's OK though, because all those people who can't afford a mortgage can just rent the same properties for even more money.
ReplyDeletehuh?
ReplyDeleteSorry, trying to condense complex social issues into one sarcastic sentence never works well.
ReplyDelete15% of Apartments are categorised as 'affordable', I'm guessing that at least 30% of people who would like to buy a home would only be able to purchase an affordable home. So all of those people who don't get lucky then have to rent, which costs more on a month-to-month basis than paying off a mortgage on a property which you actually own. It's a backwards set-up which ensures that the less well off are throwing their money into the pockets of the well off landlords.
Or at least that's how it is in the UK.
Maybe. There are a bunch of variables, and I've gotten different results (widely) with different premises. I don't like it when that happens. It makes me itch.
ReplyDeleteI am, though, going to go against the grain and say that while having a safe affordable place to live is a fundamental right, that owning is not. I'm less interested in using government to ensure everyone can own a place than I am in making sure everyone has a place.
Agreed that ownership of a home is not a right.
ReplyDeleteThe ability to accumulate capital by keeping all non-essential expenses below a certain threshold of your income (in other words, "the ability to choose to better your economic prospects") ... is that a right? I remember something about "the pursuit of happiness," but I don't know if it should apply.
Because the rent feedback cycle Brian talks about has consequences on the flow of capital.
Maybe, and I think that's part of keeping rent affordable, defined largely as less than 30% of your gross. Preferably under 25%. So long as rent is below the 30% measure, you can still amass wealth. Not easily until you hit like 20%.
ReplyDelete(I did a little research on this, and will happily share. I'm about to go run, and then there's chores and crap, so I'm mostly gonna disappear.)
But, yeah, my conjecture is paying rent does not mean not amassing wealth. You can do both, and a mortgage is not the only (not even really the primary!) vehicle to amass wealth. At least, sitting from my rent paying never planning to own perspective.
ReplyDeleteWell ... median family portfolio of equities is <$50K. Median family equity in real estate is >$200K.
ReplyDeleteI don't dispute that people could build wealth in other ways, but it doesn't seem that, by and large, they are. I'm quite sure I don't understand all the reasons behind that.
I mean, leveraging, right? I don't borrow at 5:1 to invest in the stock market, but that's 20% down on a mortgage.
ReplyDeleteDefinitely that. Also, I suspect there's a benefit to the fact that the money spent monthly servicing interest on that loan is pulling double duty in that it obviates the need to pay rent.
ReplyDeleteAnd don't forget the truly ridiculous tax loop hole of mortgage interest deduction, by far the single largest amount of spending in the tax code.
ReplyDeleteYeah. I agree with you that there's no inherent right to own a home, but I do feel that people have a right to equal access to the financial benefits that are (right now) inextricably linked to home ownership.
ReplyDeleteSo many hidden taxes on being poor.
You don't have to be poor to avoid home ownership; we are (technically) UMC, and will never own.
ReplyDelete... and you therefore will not have access to the financial benefits we just outlined above (tax-breaks, and using your rent money twice). Right?
ReplyDeleteCorrect. Nor will I need to mow the lawn, repair a house, and the myriad of chores and headaches that come along with home ownership. For me, its a fair bargain and choice made. For others, it is the only option, and that ain't cool.
ReplyDelete[ Of course, there are also benefits to hoarding money in retirement accounts like I do. ]
ReplyDelete