[munk-a]

We have these in BC - they were adopted in response to overseas real estate investment (and other factors) driving the Vancouver housing market insane. Canada also has a number of programs that make property purchase for new homeowners more affordable by waving some taxes and allowing interest free borrowing from your retirement fund. So the fight to keep housing affordable for everyone is a difficult one.

One of the issues is that when these sorts of policies initially roll out you tend to see a contradictory effect of sudden spiking in prices as a lot of people who were on the fence suddenly decide to add to the housing market demand - but over time these policies tend to settle in a place where thing are more affordable.

The other issue is that the renewal period for first time home owner benefits is quite long, so if you are exiting a long term relationship or trying to pick yourself up after bankruptcy you can be forced to enter the market as if you were a well established asset holder.

[fleddr]

"but over time these policies tend to settle in a place where thing are more affordable."

I seriously doubt that to be true in a low supply situation. In the Netherlands, the government reduced real estate transfer tax from 8% to 2%, and sometimes even 0%. This should make houses more affordable to newcomers.

Another well intended measure was for older people to share their wealth to their children via early inheritance, tax free.

The market simply adds this discount and extra start capital to the price "room". In a situation of perpetual scarcity, the price will rise to the maximum people can afford/borrow.

And with "people", I mean only the buyers. It doesn't matter if 90% of the population is priced out of the market if the richest 10% is still enough people to buy up all supply.

This last bit is most worrisome, because it means that even the nuclear instrument of increasing interest rates is unlikely to resolve the issue. The interest cannot be jacked up much because that would bankrupt the middle class. A minor tweak will be no issue at all for the richest 10%, so the price will not come down.

Increasing supply in a dense and popular area isn't a structural solution. Not only does it meet a lot of resistance, new demand will forever continue to outpace the constraint of delivering new supply.

Which is why I believe in reorganizing demand. These dense areas are dense because it gives people access to jobs and education. If we reorganize that into a more sane distributed way, we truly address the problem.

[kennywinker]

> Canada also has a number of programs that make property purchase for new homeowners more affordable by waving some taxes and allowing interest free borrowing from your retirement fund

Some further flaws in the system: I was shocked to find out that the new home buyers tax credit only applies to homes under $500k - which in vancouver means it only applies to a handful of small condos. It's also not poolable, so two first-time buyers going in on a $501k condo are disqualified.

[azinman2]

I thought Cambridge, MA has a great system — the first $250k of any property value is tax free (or at least it was 10 years ago), and property taxes then only go above that. It had the effect of making property taxes cheap for small home, allowing lower income people to have more affordable housing over the long term.

[dublinben]

Homestead exemptions like that are common in most states.[0] Cambridge does have a lower than average residential property tax rate, mostly due to how much commercial development they have. I still wouldn't point to Cambridge as a particular success in terms of affordable housing though.

[0] https://smartasset.com/taxes/what-is-a-homestead-tax-exempti...

[preinheimer]

> but over time these policies tend to settle in a place where thing are more affordable.

Could you point me at some more reading that talks about this? The increase in prices makes perfect sense to me, but I don't really have a good handle on why things would come back down.