[zachthewf]

I completely agree. It's not just retirement-age people either. I've noticed many Bay Area peers in their ~early 30s buy their first home and (understandably) swap camps from "very concerned about housing prices" to "happily watching their massive investment grow."

Is there any realistic path (even a very optimistic one) towards the Japanese model of house-as-depreciating-asset in the US?

[magicsmoke]

Japan tears down their houses because they're worried about older houses being unsafe due to earthquake damage.

So I guess the most realistic path would be for the big one to hit California and destroy all the housing stock.

[fiblye]

Also because they get moldy and stink from the humidity, and because many people believe they have ghosts.

The absolute quickest way to kill home value in Japan is have someone die in it. Absolutely nobody will want to live in the place and property owners will warn you before you consider looking at it.

If old people in the US saw their homes as a time-limited investment where they needed to sell them while they still can in order to ensure their spouse/kids have money, prices might drop. Maybe bringing back superstitions is a way millennials can finally take back the housing market.

[legolas2412]

I think I should move to Japan and buy cheap haunted houses.

[smsm42]

Realistic plan for what?

[AnthonyMouse]

> Is there any realistic path (even a very optimistic one) towards the Japanese model of house-as-depreciating-asset in the US?

One path toward that would be to eliminate property taxes. Governments want high housing costs because it increases property tax revenues. Take that off the table by generating the revenue some other way and it becomes a lot easier to pass policies to reduce housing costs. Meanwhile you throw the homeowners a bone, because even though their house isn't appreciating anymore, that's offset by all the property tax they no longer have to pay.

[legolas2412]

I don't think that's true. Building more houses would also definitely increase property taxes, but the government is not doing that.

Currently, people are already spending a really big part of their incomes on rent, and hence property. It is not possible that they'll spend any more.

[AnthonyMouse]

Building more houses increases property tax revenues, but it doesn't increase them per capita because now you have more people. The government's costs are per capita, so that doesn't help them.

By contrast, increasing property values generates more revenue per capita, so property tax gives the government a perverse incentive to increase housing costs.

[alpha_squared]

How do you fund all the programs currently funded by property tax? Not the least of which is local public education.

[AnthonyMouse]

By using other taxes, like income tax or VAT. The point isn't inherently to change the amount of government revenue, only to shift where it comes from so that existing property owners don't revolt when they paid a certain amount for a property expecting it to appreciate and then it doesn't without anything to offset it.