patrick.net

@Troy,

So you want the US to follow the HK and Singapore model? Guess what? They have even higher real estate prices than we do! Rental housing is widespread in both places.

You really need to give up on your Marxian Labor Theory of Value. Modern economics has long moved beyond that. Karl Marx himself halted the second volume of Das Kapital after learning about Carl Menger's Marginal Utility Theory (invalidating Marx' earlier faith in Ricardian labor theory of value as shown in Volume One of Das Kapital). Value is determined subjectively by the two parties in an exchange, and a voluntary exchange takes place not because both parties agree the two goods are of equal value but because each party has exactly reciprocal preference! e.g. if I have 10 apples and you have 10 oranges, my preference for my first orange is greater than my preference for my 10th apple, and your preference for your first apple is greater than your preference for your 10th orange . . . then we can have an exchange. Whether an apple is exactly equal to an orange is irrelevent and impossible to judge (apples to oranges).

Money for housing exchange (rent) is legit so long as both parties enter into the rental agreement voluntarily, without coercing each other (or third party agents acting on behalf of either). Rental housing provide several very important social functions:

1. Provide housing to people who want housing on intermediate time horizons (a few weeks to a few years), much less expensive than hotel stays or the vagaries of buying houses;

2. Upkeep and maintenance of those same houses. Short-term home users wouldn't pay for long-term improvements like trees, fences, driveways, etc., or even properly fixed roofs.

3. A stable retirement income for retirees; no I'm not in favor of liquidating them.

4. A stable tax base for the town in times of economic downturns and vacancy

5. Lower cost of housing in boom times. I'm have been taking advantage of this for half a decade waiting for purchase price to drop, and you obviously took advantage of that too when renting from the old lady for $90/wk. Cost of housing would be much higher if either of us had to buy. If I had bought a similar house in the area when I started my current lease half a decade ago, I would have lost $300k by now! in capital depreciation alone, and another $270k in interest payment and taxes (total $570k in potential dead losses) instead of the $180k or so that I have paid in rent so far.

6. Less credit-worthy people and families need a place to live too, even if the banks wouldn't lend them enough money to buy a house.

Individual landlords can upkeep and market the rental units much more effectively than a government bureaucracy. We get a hint of what a bureaucracy for housing is like in the fiasco that is known as mortgage lending in the past decade (most of those loans were passed on instead being retained by the lender, like an individual landlord would be have his skin in the game). So long as the government is not forcing people to stay with a particular landlord (like a mental hospital or prison), the private landlords are actually working pretty hard for their money: the tenant can leave and sign up with another landlord at any time! A high LVT would actually function as a cartel price fixing for landlords.

@quesera,

In regard to this particular property, I didn't care if it goes up or down. As far
as I'm concerned, I could afford it. I could practically pay down in 10 years, if
I wanted to. And my son does not have to suffer from asthma being so
close to the beach.

Now the property sits empty. The big beautiful window is broken. The sun
deck is damaged. When I first looked, the house only needed minor repair.
I wish the property was bought by a renovator who at least knows how
to fix and maintain a property. Now, I don't really want to live in it.

I am not so sure whether the housing market is still heading down. Looking
at Silicon Valley, I am not so sure. My real estate agent told me that her
clients are making money flipping still. That sounds like "Lurking" is right.
And suckers are born every minute especially in Silicon Valley.

Like Lurking said, I am just a few grains of sand in the beach. But I think
I would stick to it. It served me well.

@Troy

>My LL was a nice guy and gave me back my Y220,000 in Y10,000 notes when I was leaving after 5 years.

A very rare (in my experience) yet pleasant story. Maybe you can rent from again if you return here...