[coding123]

There needs to be some standard addendum attached to homes as an option that anyone selling a home can attach to the sale. Something like:

This house cannot be used as an investment vehicle. It cannot be sold by a real-estate agent with a contract of more than 1%. It cannot be used as a rental. It cannot be sold for more than inflation would allow.

Anyone found violating this addendum may be sued. All proceeds from the lawsuit (after fair lawyer fee of 40%) shall be used to build new homes (as in it can only be used to fund actual building materials, not generic non-profit companies).

This might not be the best approach, but we need a home renaissance that redefines home ownership across the world so that no one has to be homeless anymore.

[peterldowns]

(Ignoring the obvious problems of how such an addendum could be written and enforced.)

Why? When would it make sense for someone to attach this addendum to a sale? All these penalties and restrictions would only mean getting paid less for the same property. On the buyer side, why would anyone want an asset like you've described?

I live in a home that I enjoy in part because it is a fantastic investment that is highly-leveraged (through a mortgage) in a way not possible for other types of assets. If I need to I can rent out rooms or the entire property. I can sell it to whoever I want, whenever I want. I can borrow against my partial equity in the property. My mortgage is 30-year fixed, but I can always refinance (with no prepayment penalty) if rates go down below my locked rate.

I wouldn't want to buy a house without these benefits, and I don't know who else would. If this became standard it would reduce demand for this asset class, and therefore make it less profitable to build new housing, which is exactly the opposite of what you want.

[photonthug]

Buyers might want an asset like that because they could afford it and because they don’t have to gamble about whether the smoke and mirrors keep going for the 30 year duration of their mortgage.

Congrats on your fantastic investment and other high octane adulting, but even if you’re winning, look around, a huge chunk of the “wealth” of nations is tied up in real estate nonsense that represents a vast and willful collective kind of madness. This should freak everyone out in aggregate even if they like the idea of their own position.

But more concretely.. everyone pays the “investment vehicle” premium even if they aren’t trying to invest, and even if the home or area definitely can’t deliver a ROI. After pricing lots of the more thoughtful and plan oriented people out of the ability to have children, we are probably well on our way towards pricing single people out of the ability to have a home, even after some market crash that cuts those prices drastically. And yet western society in the northern hemisphere is too individualistic to dwell together collectively in larger family clans or even friend groups long term. To put it mildly, housing as “investment” is a really bad idea, and we’d be better off if people that are interested in that just stay busy with stocks instead. Less mild, we’ve moved past the point where it’s merely unsustainable.. it’s actively destabilizing judging from the rise in populism everywhere.

[krisoft]

> Buyers might want an asset like that because they could afford it

Sure! As a buyer i’m happy to buy your house for tenth or twentieth of its value. I can afford that! You can add any silly stipulations to the contract for that price. When are we signing?

[krisoft]

> that anyone selling a home can attach to the sale

Why would anyone attach that to a sale? I bet that such terms would reduce the money you can get for the house to at least a tenth of the unencumbered value. Simply because it will make all future sales so much more complicated and risky. It would reduce flexibility for the person who now owns the home. (Especially the no-renting rule.) Banks would not touch such transaction with a 20 feet pole so the buyer better has the whole sale price in cash. Which means only wealthy people can buy your house.

You might be grinning about all of these consequences and thinking “yes, this is exactly what i want to achieve”. But what is the incentive here for the home owner? From their perspective choosing this option loses them a lot of money, so who would do this? And why?

Sounds like the home owner could just douse their home with gasoline and light it on fire. From a value perspective it has about the same effect. I predict it would be similarly popular too (that is not popular at all). Which means very few happless people would be stuck with this weird situation, while at the same time the option would have about 0 effect on the wider market. (Maybe it would add some extra legal checks to buying normal unencumbered property increasing the legal costs for everyone. Just to verify that nobody had added such an agreement to that particular property in any point in the past.)

[jolmg]

> It cannot be used as a rental.

It's not just the home-buying market where prices are high. It's also the home-rental market.

> so that no one has to be homeless anymore.

People that can't buy may no longer be able to rent either because of the supply you constrained. Homelessness would probably go up.

[BehindBlueEyes]

Yeah I agree with this.

Rental is not necessarily the problem compared to leaving houses empty because they're worth more as investment than putting in the work to rent them out. And the number of Vacation rentals in my area is a bigger issue than rentals or empty houses. Why house community members for $2000 a month when you can charge that per week to tourists part of the year and make more money, right?

[jopsen]

Variations of this concept exists many places.

It's not bad.

But does lead to people unable to move. Because they don't earn enough from the sale to buy a new house. And buyers can't get a property nobody is selling (so you risk corruption too).

Could also cause a bit of market distortion. Probably not a huge problem.

[throwaway2037]

Are there any highly industrialised economies in the world where real estate agents get only 1% fee? I find it hard to believe. That would mean a 500K USD home would result in an agent fee of only 5,000 USD. Even if they sell one per month (unlikely), their revenues would only be 60K per year. It seems impossible, as expenses (company car and small office) would eat up a lot of that revenue.

Also: Take a look at housing in France (outside Paris), Germany (outside Berlin), and Italy (outside Milan). It hardly changes faster than inflation. How do they do it? Low population growth, combined with careful community planning (new housing starts, etc.)

[crooked-v]

Or, you know, just actually build enough houses for people to live in. I feel like that would be a better start than suing people into bankruptcy because they made 5% off a house sale instead of of 4.5%.

Houses are only an attractive investment vehicle in the first place because there is a massive shortage of housing.

[pfdietz]

YIMBY. Preach.

[Sohcahtoa82]

Some local residents were fighting against some new apartment building being built, claiming that the area wouldn't be able to handle the extra traffic, it wouldn't have enough parking, etc...

Meanwhile, not only was there going to be 1.5 parking spots per unit, but the main entrance is literally 500 feet from the metro line. Many residents there were likely to not even have cars. And it was just one building with 40 units placed next to a major throughfare. Plenty of traffic handling capability.

I imagine everyone fighting it was a homeowner worried about increased housing availability lowering the home's value.

I own a house, and there's a new complex being built about half a mile from me. Judging by the size of the plot of land and the poster showing what it's going to look like, I imagine it's probably gonna have ~200 units. I'm all for it being built. My house has gone up in value by ~62% in 9 years and that's ridiculous.

[fragmede]

Which, like, subsidies for building housing is the way out.

[pfdietz]

No, just getting rid of obstacles. Zoning is a cancer.

[BehindBlueEyes]

zoning has uses, like avoiding cancer causing industries in the middle of residential areas. It's just used to support housing as an industry. It could be used to increase housing affordability, reduce urban deserts requiring long drives to the nearest grocery stores etc... if it was wanted.

[BobaFloutist]

Or we could just build so much housing that it becomes a buyer's market.

[coding123]

I love how no one replied to the last sentence, almost like that doesn't matter, the part where you restrict my right to rent matters more than anything.

[BehindBlueEyes]

I don't have a magic bullet solution to what a home renaissance could look like. In some ways it might require re-thinking what home is. Maybe taking inspiration from indigenous long houses with 10 families sharing a space would be a good step forward. It could be more sustainable in terms of energy requirements, solve for some of the loneliness issues that are prevalent nowadays, as just 2 top of mind things.

But our culture is very individualistic and values greed and puts exploitation of others on a pedestal. I don't believe this would really work with the predominant mindset of meritocracy or even be appealing to most as we feel entitled to our own space, ways of doing things, property etc.

We see community and the related obligations as a burden and put the individual at the top. I think changing this would be a preliminary requirement to solving homelessness.

Not that I have thought this through from all angles, but I believe this is a major blocker.

[frmersdog]

I think that would be a restrictive covenant.

[coolspot]

Homelessness is mostly caused by drugs and/or psychiatric illness.

[dredmorbius]

Expensive and/or insufficient housing doesn't help.

Rich drug addicts tend to remain housed, at least to a greater extent than the poor.

Getting forced onto the streets tends to compound any preexisting tendencies to poor mental health and/or addictive tendencies.

[specialist]

If one first excludes PTSD, domestic violence, health issues, loss of job, and being a homosexual (youth), then -- yes -- the top two causes are in fact the two television tropes which most confirm one's priors.

Well spotted.

[coding123]

Which is caused by falling deep into debt and realizing you won't have a home in a bit.