That’s a terrible idea. The real life effect is that prices will simply go up. You need to force down real estate prices in general, and offer very low interest rates for first time buyers.
Most of the housing price increases are driven by investors, not first time home buyers. This will have its intended effect. Obviously we still have to build, but this is like claiming minimum wage causes inflation.
At worst, youre partially right. Maybe they’d go up 10K, but certainly not 25K. That’s just not how markets work. It’s the same argument as saying UBI will increase prices - yes, it will, but not by more than or as much as the UBI is. If everybody else sells their home at $25K more, you can sell yours in a month by going down to $15K more than before.
I agree, and i didn’t say it will increase prices by 25k. Still think this can be tackled in better ways. Low interest rates over a 20-25 year loan can save you much more than 25k. Edit: let’s ban corporate from buying up blocks of residential areas. It won’t cost you any tax money and will immediately drop the prices
Yeah, that’s the real solution. We have to ban any one entity owning more than 2-3 residential properties. The $25K is simply a decent stop gap until we can actually make that law happen, because our capitalist overlords would never allow it.
It does rather sound like proposing an immediate 25k hike in house prices, yeah.
It’s not. First time buyers are a small portion of the market.
The fact that it’s limited to first-time house buyers will at least help mitigate some of the advantage that commercial real estate buyers have over ordinary folks that are just trying to get a roof over their heads.
They did this in 2008-09 with an 8k payment to homebuyers that wasn’t a loan and didn’t have to be repaid. This enabled me to but a foreclosed house and make it livable, and I’ve been living in it since then. It didn’t raise prices in my area, because no one was buying houses anyway because regular possible couldn’t afford it.
I don’t know if I would have been able to get so financially situated if that payment wasn’t there. I could’ve bought the house, but I would not have been able to fix it enough to ever stay on top of the maintenance and bills.
Would this be exactly the same situation? I dunno. But I know a similar push sure worked in the past.
And didn’t advertise it well. I bought my house then and didn’t know I had this until it was too late.
The argument isn’t that this payment won’t help people in the short term, it will. The problem is that if you have an extra 25k to spend and it’s given to every first time buyer, they’ll just shop in a 25k higher price range. And if the sellers know this, they’ll adjust the market for what everyone can afford now.
This is basic economics, you lower the quantity of available housing by allowing more people to afford it and the price will go up. There’s a reason our solution to every affordability problem works this way and breaks things. For student loans for instance, sure we can pay them off for you, but does that bring down the cost? No. It just means the government pays universities. Same thing here, the government is just letting you use your taxes to give to a real estate agent instead of addressing housing costs.
Different situation, as that was after the market crash.
Yeah a similar policy in the UK (from 10ish years ago) is one of the biggest reasons for hugely inflated prices among small properties.
Obviously, the only real solution is to work to lower real-estate prices, but that would be unpopular with most home owners (who are a majority in the US).
Require that homes that are not homesteads be sold within 6 months as a homestead or they’re auctioned off to the highest bidder that will take it as a homestead.
We had a help to buy scheme in the UK similar to what Harris is proposing. Spoiler warning: it didn’t help.
Only thing that will stem the demand is a massive house construction scheme and outright building new cities.
I’d argue we don’t necessarily need more homes. I think what most cities need is really to end zoning.
There is more than enough commercial and industrial vacant properties over the US that could very feasibly be turned into residential housing to house every person ten times over.
Zoning really is the problem because developers are essentially being forced to build unwalkable communities. You’re just not allowed in many cities to buy old warehouse space and develop it into housing or to build small businesses (groceries, shops, etc) in areas zoned residential.
Ending/reforming zoning would solve so many issues… (I say /reforming because there are limits, most people don’t want to live 10ft from a factory). But I hardly hear anyone talking about it whether on Lemmy or in the media… but it seems like it would fix so many issues.
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Unfortunately in Germany this is only in the older city centers. It’s far less common in newer “suburban” developments.
Incentivizing new construction for homes people actually live in is another facet of her plan.
You don’t need more cities when there’s about 7 times the empty, perfectly functional living quarters for the amount of homelessness.
More houses is not the answer. There are plenty. Making more just make greedy capitalists more fuel.
Use what we got more efficiently.
I agree here. I don’t see how anything will help that does not involve buidling more. heck build it till its not profitable rent property. didn’t china boost their economy with building housing?
Only thing that will stem the demand is a massive house construction scheme and outright building new cities.
Even this won’t work, because we already have more houses than people. The issue is that corporations bought up all the houses, and are intentionally letting them sit vacant. The end goal is artificially reducing the supply, so they can sell fewer homes at exorbitant rates.
Basically, imagine there are 1000 homes, for 1000 people. Each home goes for an even $100k at fair market value. Big Corporation buys 250 of them, (for a grand total of $25M) and lets 200 sit vacant. Now the remaining vacant homes are going for more than $100k, because the supply has been artificially reduced. Now when they sell those 50 homes, they can do so at $300k each, making a total of $10M (that’s $15M from their 50 sales, minus the $5M they paid for the 50 originally) off of just 50 houses. If they just bought and flipped all the houses, they’d only be making small profits per house. But by sitting on a bunch of them, they’re able to make more per house.
In short, they made absolute bank on those 50 houses, and can now buy more houses to repeat the process. They haven’t made all of their money back (yet) but they don’t care about the short term because they can just repeat the process again and continue driving rates up.
So when they eventually sell those 200 homes they’ve been sitting on, they can do so at those exorbitant prices that the market has come to expect. And when it causes the market to crash (because they’re no longer letting houses sit vacant) it’s the homeowners who are all underwater on their mortgages. So the company is able to get away scot-free by ditching their supply, while the homeowners get fucked.
Landlords are also doing the same thing, where they’ll own 1000 units but only rent 200 of them, so they can charge higher rent on those 200, while the rest sit empty.
What they need to do is implement a scaling tax for vacant homes. The more vacant homes you own, the higher the property tax is on each one. So the upper-middle class people can still own a summer and winter home without getting fucked. But make it unprofitable to buy and sit on hundreds of vacant properties, just to artificially reduce the supply. If a home or apartment is vacant for more than one calendar month in the year, it counts towards your vacant property tax. Incentivize the sale and rental of homes, instead of allowing them to quietly buy up and sit on properties.
I would like to see a tax on third properties and above that sit vacant for more than 6 months a year then 10% of the property value as a fine which would go to a ministry supporting unhoused people.
There would probably have to be some provision that if the property is rented out then for tax purposes the rent must be considered at the market rate -15% at the time the agreement was made. Eg a corpo couldn’t rent a bunch of units to a subsidiarity and call them occupied since they are rented arrive they would have to pay income tax on the income.
This isn’t fair to people like me, who were fortunate enough to buy their first house without 25k from the government. Won’t someone think about how disadvantaged I am!
There are plenty of people that think this way. They’ll happily slap a free glass of water out of a thirsty man’s hand because they were there thirsty yesterday and no one offered them water.
Instead of being happy for the thirsty man getting some water, they’d rather he suffer the way they had.
Having experienced this kind of policy in Australia; it’s great in theory - but the issue is that builders/sellers just ended up jacking up the prices of their homes to absorb the grant.
I don’t think this is possible. First time home buyers aren’t buying in cash. They have to get bank loans and banks won’t loan if the appraisal doesn’t match the buying price.
Obviously I don’t know Australian law but at least in Texas this would prevent the house from closing.
Yup, this is just going to put an extra $25k from every sale into the builders’ pockets.
Ya’ll are getting newly built homes?
It’s the reason colleges here are stupid expensive as well. Greed.
What’s the exact policy in Australia?
It varies a bit by state, but it usually only applies to new builds now: https://firsthome.gov.au/
Well there’s the issue. Builders can control the amount of new builds to max out that $25k. They can’t control the number of first time buyers though
Watched the same thing happen on a smaller scale back when analog TV broadcasting was phased out and we got vouchers for digital TV tuners in America. They all cost around $25 or less. As soon as the vouchers were given out, the prices doubled to $50
Surely this is a well studied phenomenon with a name, right?
Pretty sure this is inflation
No. Inflation is a general increase in price/decrease in buying power per dollar. This is specifically about one class of item increasing in cost to absorb a government subsidy, especially when that subsidy was meant to alleviate a cost to the citizen.
It still shifts the balance of power in favour of first time home buyers. Landlord fucks have to pay extra.
Helping with a down payment makes it easier for a homeowner to assume debt, but that doesn’t make the houses cheaper.
This actually makes houses more expensive, because now buyers have more money to outbid each other.
So giving first time homebuyers cash assistance in buying a home is a bad thing, because letting millennial and gen-z Americans have spending power will just make things more expensive?
I don’t buy it. How is $25k in cash assistance worse than no assistance at all? Would a $25k penalty be beneficial because buyers would have less money to outbid each other?
This just sounds like a boilerplate argument against helping the working class.
The issue with housing is that the supply is limited. If you increase demand and not supply you just increase prices. Giving buyers $25k extra to spend means every home owner is now gonna jack up their selling price by $25k. This is, in the end, a subsidy for existing home-owners. Who already are doing pretty well, thank you very much.
Denying the existence of supply and demand always lead to policy failure. The way to address housing cost is to lower the cost of housing, not make housing more expensive by helping people outbid each others.
Its become a worldwide problem because airbnb brought in extra demand from the luxury hotel market. Even if you tripled the housing supply it might not make housing affordable given that like a security guard that wants to buy a house will never make enough to compete with like the millionaires going on vacation every other week.
There needs to a be a large tax on airbnbs in residential areas that helps pay for public housing.
Consider how the federalization of Student Loans has contributed to the price of college outpacing inflation by many times, and income by a magnitude.
That’s still only part of the problem, of course, hiring university leadership from the for profit business sector, privatizing loan servicing, etc. have all made college tuition skyrocket, but the loan program is a major issue.
A better option for college would be to subsidize universities directly with the requirements that their tuition stay within a linear relationship to inflation. Somewhat like state colleges offering low tuition for residents.
Housing needs more federal controls, which, to her credit she has explored in her platform along with disincentivizing, exploitative investment in private housing.
I’d rather they raise the cap on deductions (mortgage interest, state and local taxes) back to how it used to be Pre-Trump and give additional tax rebates to first time home buyers. His tax bill raised my effective tax rate a shitload. I would never have been able to buy my first house without those provisions.
The current cap really only affects rich people though.
Given that a “starter house” has gone from 150 to 400 grand in my area on the past 4 years, I’m not so sure.
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This will just add to the house price inflation.
this will get all kinds of messed up. I had one of these years ago. It used to be you had to take a home ownership course. Had to earn under X amount and not have owned a home in the prior 9 years. You had I think 10 months to find house.
NOW you have to be of a specific demographic, the sum us larger. and yay need ti already be in close on the house. Which is nuts because if you are already in closing there’s a huge chance when you go to apply the funds are gone. Can’t afford the house. Before, the grants were limited/. But you knew before CLOSE that they were out of grands for the year.
Won’t help with high property values, high taxes, and unaffordable home insurance.
It will absolutely help with high property values. It will help them go higher. Same with student debt forgiveness.
For the record, I’m in favor of both
This would be great but you know centrists will fuck it up and it’ll be like, “You can get up to $25,000 as a tax credit if you’re a veteran who owns a small business in an opportunity zone and have a low income but also somehow have a spouse who is a lawyer and can spend 30h finding and filling out the paperwork and tracking down bank statements from when you both were 19.”
On top of that just pumping support money into real estate doesn’t fix either of the core problems: people aren’t being paid enough to afford homes and we’re not building enough homes to keep prices reasonable. The end result of this is that home prices inflate even further. If we treated houses as housing rather than investment vehicles we could actually do something about our housing crisis.
This dude bureaucracys
I’d rather have a fix for our broken credit system. Denying someone a loan that will be a 2200$ house payment in an area where they will be lucky to get a 3k apartment is insane.
In this generation helping home buyers is like helping the wealthy. Most of us have no hope in hell of ever coming close to buying.
How about this: crank up the taxes on houses people don’t live in. Make owning empty real estate so unprofitable that it’s better to rent it out cheap than to try to screw renters.
Make it a crime to own an empty house.
Fwiw in Florida we have what’s called a homestead exemption. You get a big slice of your property value axed for taxation purposes if you live in the home. You have to pay full tax on any other properties. I believe tax rate increases are capped for homes with the exemption as well, but that might be for all homes. I don’t remember exactly.
How do they verify you live there?
You can only list one home as your permanent residence.
You can have 1 homestead. So you either live there or are paying full taxes elsewhere.
It also has to be your legal registered address.
It’s 50k it’s pretty much a joke based on property values. They could increase property tax and increase the exemption but it’s not going to happen
I want to see an exponential property tax so you could have a house and something like a small cabin somewhere but anything more and then your tax multiplier is based on how many properties you own, you’d have to control for businesses trying to own property in an employee’s name, this might even help with large chain businesses not becoming a monopoly but hard to say if that’s a huge benefit or a monkey paw type thing
You said this last time when you ran with Biden.
And? Was she some kind of dictator before and I missed it?
