With the global housing crisis caused by great, silent, boomer, and gen x nimbys opposing housing construction to keep their home prices high, it seems that this profit incentive will stifle any attempts to keep housing affordable for multiple decades.
Japan has fixed this by making housing a depreciating asset, by taxing and selling housing and land separately; meaning a house loses value once you buy it because there is more profit to demolish redevelop and rebuild a house than occupy a never changing neighborhood.
Zoning laws and standards are national promoting permitting efficency and national standards to promote dense urban pedestrian and public transit oriented development.
We should follow their lead to solve our housing crisis and make housing a human right
EDIT: NIMBYs are mad at housing affordability so they are lying
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Upvote because yes this is unpopular because of how stupid it is.
That’s literally not how assets work.
Japan did not “fix” this. No one made attempts to purposely make or wanted housing to be a depreciating asset in Japan. It’s just a consequence of the declining demographics and the culture. It’s the same capitalistic forces that you hate but working in favor of the potential buyer
Edit: I think OP edited the post and clarified by talking specifically on separating homes and land unlike what other countries have where we bundle this. This is fine, I can agree with this!
Houses physically are already a depreciating asset in most places but when we talk about “housing” in the United States, we usually are referring to land+the physical house which is why the title talks about housing like it is appreciative which makes it confusing.
I feel like I share the same opinions. I’m willing to bet OP like me hates bad zoning, suburban sprawl, car dependency, bad public transit, but fuck, most of you guys in this space are so snobby and insufferable that it’s impossible to get anyone into a good cause
Japan is not a good example because they have a significant problem with population decline. Their social services/retirement system might collapse in the future without significant changes due to there not being enough working aged people paying into the system.
You can’t just “make” something a depreciating asset, it’s the nature of the asset itself. Houses degrade structurally from wear and tear. It’s the lot your house sits on and the surrounding area that appreciates.
How would that even work? So, I own a house for 30 years and it has fully depreciated by then. Now, I need to move so I have to buy a new house or find a place to rent.
Normally, I would sell my current house and use the $ for the new place. If it fully depreciated as you talk about, what happens? Do I give it away? No, that’s dumb. So, how does it work?
House itself? Sure. Land? No.. this isn’t unpopular, this is uneducated.
The potential value of redeveloping and rebuilding is why housing prices appreciate (and also inflation), so using that logic wrongly as to why Japan’s is a depreciating asset is just not understanding the very basics of economics.
OP, please, go educate yourself on how supply and demand works, then go learn what an asset is.
upvoted bc this gotta be the worst opinion i’ve ever seen on this sub 😭
wait a few decades when the US has the same population decline that japan is seeing now.
Boomers don’t cause this. When housing construction is boosted, developers build 100-200 unit RENTAL apartment complexes. single family homes aren’t in the mix, in fact they’re tearing them down to build apartments.
This sounds preposterous on its very premise, but your claim that Japan does it intrigues me. How is that even possible?
Sometimes it is if really trash people live there and ruin the place? However with a well maintained piece of real estate, there is no reason for it to go down in price.
How can you force something to lose value. The market determines value. I live in a permanent trailer on 10 acres. Even though the trailer depreciates the land it’s on does not because you can’t just create more land. My husband believes that it’s not home but the land that is appreciating. People are willing to pay more in certain areas. That’s also why the cost of housing varies so much. My old two bed 1 bath is like 50k in my area, same house in Chicago probably be like 130k. location plays a big part in cost of housing.
I don’t believe the government should force depreciate anything. If people are willing to pay more they should be allowed to pay more. Considering how many people end up in bidding wars over houses I don’t see how they could do it.
Japan didn’t do anything. The depreciation is the result of other issues in the country. Depreciating a house / land is a terrible idea
The only way to implement this is by reducing the population. What is your plan for that?
How can you force something to lose value. The market determines value. I live in a permanent trailer on 10 acres. Even though the trailer depreciates the land it’s on does not because you can’t just create more land. My husband believes that it’s not home but the land that is appreciating. People are willing to pay more in certain areas. That’s also why the cost of housing varies so much. My old two bed 1 bath is like 50k in my area, same house in Chicago probably be like 130k. location plays a big part in cost of housing.
I don’t believe the government should force depreciate anything. If people are willing to pay more they should be allowed to pay more. Considering how many people end up in bidding wars over houses I don’t see how they could do it.
My god this is a silly idea
Why would anybody take out a 25 year mortgage to buy a property that depreciates to nothing?
It shouldn’t be a depreciating asset that would be stupid. However, it should be allowed to depreciate. It is one of the few assets that seems to never do that. Even when the market signals suggest it should. At least in the UK this has been the case.
The main thing wrong with housing for me is the everybody needs a house mindset. Why do my parents need their own house, and I need my own house, and my kids will eventually need their own house? Perhaps if everyone moves to different states or countries but if I can accommodate it, I’d prefer one complex with my family on it.
It’s land value that creates high prices, less so than the structures. If you think we should start depreciating land, head over to r/accounting and give that idea a spin and see what they think .
In accounting it is impossible to depreciate land because of the fact that land will always be valuable, and moreso as the global population keeps increasing
If you don’t maintain it, it is depreciating.
This is simply just uneducated
It’s not just the generations you mentioned who oppose building. Lots of young folks push against housing that is market rate. Like this is a problem all generations have with opposing housing
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Then there would need to be a higher supply than demand.
A lot of angry people in this comment section throwing out random economic words like they have any idea what they are talking about.
Housing IS a depreciating asset. Land is the part of your house that actually appreciates. In America they are the same thing. In Japan, they are not. In Japan, the land owner and the house owner are not necessarily the same. In Japan, houses are demolished and rebuilt after 30 years. This is one of the biggest reasons why housing is relatively affordable in the biggest city in the world: Tokyo.
The problem with America is that home owners only bought homes because they were told that it would be an appreciating asset that would fund their retirement. Now homeowners will vote against anything that could potentially lower the price of their house. We have zoning laws and a shit ton of regulation that make it extremely expensive to build a home and thats by design.
What OP is saying is that if houses were treated like the depreciating asset that they ARE, and were separated from the value of land, a ton of red tape to building houses could be cut out.
There’s a ton for research showing that building homes is the best way to reduce housing prices and homelessness. The biggest challenge to building homes is the existing homeowners (which endorse the red tape).
You can argue about the merits of this but calling OP stupid and uneducated is proving that you are the one who is uneducated.
When I used to own a flat in Berlin, depreciation was a tax deductible expense. Which was nice.
BTW, no idea what OP is talking about
They are for tax purposes. At least where I live.
Skies should be under the ground
I’m confused, housing (the building) is literally a depreciating asset.
The market value of property does not take into account any depreciation… the sales price of an asset is what it is regardless of “depreciation”. All depreciation does is affect the taxable gain on sale, but you would also need a corresponding depreciation tax deduction for this to work.
Many people do not realize that the “depreciation” of an asset’s value over time is not the same thing as “depreciation” for tax and accounting purposes. Depreciation for tax and accounting is just a mechanism to expense/deduct the cost of a long-lived asset over multiple years. It has nothing to do with the market value of an asset.
This is like saying the sky should be brown. Sure it’s unpopular. But it’s dumb and not reality
I’ve never commented here but this is the stupidest, most uneducated way I’ve ever seen this topic approached so here I am
This is great. Just stating something that is already true is now unpopular.
Unpopular opinion: You shouldn’t be allowed to depreciate land
It is
You should look into Georgism. It is basically what you advocate for but more fleshed out.
I agree wholeheartedly.
I love posts like this that lump in every older generation as if they all got together and purposefully schemed a way to screw over the younger generations…as opposed to, ya know, just living their lives the best they could like anyone else.
Japan didn’t make it a depreciating asset. It is a depreciating asset by virtue of what they value and what their climate requires. It’s always been that way – their “ancient” temples and castles are rebuilt every so often, while European castles will stand for a thousand years or more.
We don’t disagree. Rural depopulation occurs due to lack of employment in the area. The difference is that people don’t commute, for whatever reason, to the areas that have jobs. Many areas of the country have people commuting from less expensive residential areas of high employment.
Are you willing to pay higher income tax to cover the government’s massive loss of revenue if this were ever to be implemented?
Trash the single largest asset for the majority of Americans and all live in blocks like Russians? Hard pass.
Nope. The increased value of my house will be used to offset the cost of assisted living.
Naive and uneducated. All regulations are easily bypassed by adapting to it. You can make fake sales between family members and play the system, there is number of ways to address it.
Have even know a family, who faked a divorce (in Europe) to claim government subsidies. So no good intention goes unpunished
Plus, people currently not owning are not better, than ones who have where to live. Forcing one family out, to make place for the other is not solving anything
How exact do you plan to force a house to depreciate? Just because you say something has to lose value doesn’t mean it actually does lose value…
For the most part, it kinda does. The structure itself will barely go up any more than the cost of materials and inflation. What really does up over the course of ownership is the land the house sits on.
If it wasn’t for inflation, it might be
Ah Japan, an utopia /s
As Tony Soprano said “buy land, they aint making any more of it”
OP wants only party officials and loyalists to own property.
Housing should not be an asset.
Georgism mentioned raaag
I love that one of your sources is am Amazon listing for a book with a blank cover lol
We need to do something about housing costs in the US. That said, how in the fuck do you justify incentivising rebuilds, houses are the only thing left that the average American consumer (and most other countries) don’t replace within ten years. Do you want more trash in our landfills and oceans and more pollution in our skies? The world is at its breaking point and your solution to an economic issue is more trash and consumerism. Be better. Your opinion is unpopular with with conservative and progressives, poor and wealthy, young and old because it’s moronic not because it’s ground breaking.
Why not just ban rent on housing? That way landlords aren’t gobbling it up and hoarding it to corner the market. People think this is crazy but for most of human history it was illegal to charge interest. We ban all sorts of practices which are deemed bad for society. Causing homelessness is pretty bad I’d say.
Japan has a giant population problem. They have plummeting birth rates and young people don’t want to even start families. You are trying to compare two things that are radically different.
My concern with importing the japanese method to other locations (the US, Europe) is that it would ignore the built environment that already exists. And it is an incredibly wasteful and environmentally harmful way to use resources. There many other economic levers that could be pulled to change the nature of the housing market that avoid tearing down and rebuilding.
So you’re mad that houses are expensive and want the government to financially punish homeowners in pursuit of “equity”.
Upvoted, I hate this opinion.
Accountant here, my brain hurts.
Whether it should be, it isn’t. Thanks to the global forced migration; areas with modern homes have more potential buyers and renters than ever.
Maintained houses can survive forever. Many in England still survive from 500 years ago. Why would it lose value? There has always been more people born on Earth than dying, and it will still do so for many years. Maybe if the earth hits a population cap in 50-100 years, but just based off that, the price would stay the same, not taking into account inflation.
Houses are. Land is not. Which is what accounts for the bulk of the cost of buying a house. You can always build another house. You can’t make more land or pick up yours and put it somewhere else.
Yeah, people will default and squat before the first month’s mortgage is even due.
It already is in America, Trailer courts are full of houses that only go down in value. even the ones on their own slice of property depreciate. you can’t hardly get a home loan for a doublewide anymore.
So like Japan?
The cost of housing has far more to do with all of the associated permits, land, labor, and material costs than it does nimbys.
Most houses are depreciating assets. The land under them is what appreciates.
Houses are depreciable (in the USA) if you are a landlord. Land is not.
Depreciation is always bad, especially for something like housing. If I know it will be cheaper next year I will always wait to buy and never actually buy
Do you watch the Lemonade Stand podcast? They talked about this a bit ago, but I think that if you build more cheap housing, it would make prices more competitive without needing to make weird housing laws something the lemon stand guys talked about was building cheap government housing which you still pay for but it could create the com[tion for private sector housing in theory wether this work in practice is another issue
You should look into land value taxes, they sound boring at first but solve the fundamental problem you want to solve while addressing most of the criticism thrown against you in this thread
Seems like a fundamental misunderstanding of economics is happening here. We don’t “decide” that things go up and down in value. They simply do.
Say I bought a house for $300,000. Then 20 years later, people interested in buying it are forced to pay a lower price? Then when they eventually decide to sell, is it still worth anything at all?
Typical Gaijin understanding.
Japan’s fucked. Houses stay unoccupied for decades cos no one wants to bother demolishing the house for the land so there’s just houses everywhere abandoned, even in the heart of Tokyo.
It’s the land really.
You need land value tax to achieve this. Upzoning is a good idea but insufficient.
Here’s the thing. Houses are use assets that depreciate. The thing that holds the value when you’re purchasing real estate is the land and its proximity to tax generating assets, whether it be well-maintained homes in a residential neighborhood with competent school system or a thriving commercial space near eager consumers.
I’ve heard that Japan’s houses depreciate fast, but I didn’t quite understand why. So idk.
The reddit brainrot is strong with this one
Vacant housing should be a depreciating asset
We have a fixed amount of land and an ever growing population.
Oh man, you’re going to really upset the “all old houses are worth saving” crowd with this one.