Discussion about this post

User's avatar
Deadpan Troglodytes's avatar

"Affordable [housing/homes/rental units]" appears seven times in this piece and sixty times in the linked "Federal Home Loan Banks Combined Financial Report" (which is, it must be said, much longer).

Neither defines "affordable", and it's hard to tell whether the authors are using it colloquially, or in the technical sense of "costs no more than 30 percent of income" - the common definition for government programs.

At any rate, I think everyone who pays serious attention to housing in the US knows two things:

- 'Filtering — the process by which properties age and depreciate in quality and price, becoming more affordable to lower-income households — not new construction, is “the primary mechanism by which the housing market provides affordable supply.”' (https://www.huduser.gov/portal/pdredge/pdr-edge-featd-article-061520.html)

- Affordability provisions often frustrate development, both because they make the projects less attractive for investors and developers, but also because they activate NIMBY resistance. Sometimes, NIMBYs even _add_ those provisions to make projects less palatable and harder to finance.

All of which to say is: the exclusive focus on constructing new "affordable" homes seems well-intentioned, but counter-productive.

Expand full comment
Just Some Guy's avatar

Most of the obstacles to housing supply and lower housing prices are at the state level, but there are some tax policies that artificially boost the market price of housing while having almost no effect on supply. The federal government could stop doing these things. It wouldn't have a MASSIVE effect, but it would have an effect:

1. Eliminate the special tax status of REITs. For those unfamiliar, a REIT is a type of company that consists of at least 75% housing and cash and distributes at least 90% of its earnings to shareholders. As long as it does this, it's exempt from corporate taxation. I'm not a fan of the corporate tax, but as long as we have it, it should be applied equally across the board.

2. Eliminate the primary residence deduction. If you sell your primary residence, you can deduct $250k from your capital gains taxes or $500k if filing jointly. Again, if I had my way, we'd be taxing consumption anyways, but while we have capital gains, they should be taxed the same across the board. For political reasons, current owners would probably have to be grandfathered in. That's fine.

3. Eliminate SALT and MID. Again, you'd probably have to phase them out over time, which is fine.

4. Eliminate steel and lumber tariffs. Self-explanatory.

Expand full comment
115 more comments...

No posts