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Proposing an Alternative To Renting or Owning a House: Publicly-Owned Housing (theatlantic.com) 318

"Renting is terrible. Owning is worse. A third option is necessary," argues a recent article in the Atlantic, "a way to rent without making someone else rich."

It's written by Shane Phillips, who's the Housing Inititiative Project Manager at UCLA's Lewis Center for Regional Policy Studies: Largely as a consequence of housing prices, Generation X held less than half as much wealth in 2019 as Baby Boomers of the same age did two decades earlier, and Millennials are on course to hold even less. Something has gone catastrophically wrong, and the problem won't be solved by doubling down on homeownership; we've seen where that leads. But our current model of renting — a lifetime of uncertainty only to make someone else rich — won't do the job either. We need something new, an innovation on par with the government's development of 30-year mortgages nearly a century ago. We need a housing option that combines the accessibility, flexibility, and limited risk of renting with some of the stability and wealth-generating potential of homeownership.
His suggested solutiion? A public-ownership rental option: The foundation of the program would be quite simple: public ownership of housing, acquired or built with government loans — though run by local for-profit or nonprofit property managers — and rented at market prices. No saving for a down payment (or being given one by family) and no qualifying for a mortgage. The only requirements for participation in the public-ownership option would be (1) move in, and (2) pay rent.

As the loans were paid down, the equity would accrue to the tenants, minus the cost of operating and maintaining the building, administrative costs, and so on. Unlike rent-to-own programs, however, this option would never require that the tenant take out a mortgage. A renter would never truly "own" her unit. But she would claim a stake in the public portfolio of properties and be able to draw on that asset, perhaps in the form of monthly payments after a few years of renting, or larger dividends later in life, much like Social Security. The benefit could be transferred to any publicly owned apartment, allowing tenants to build wealth without being locked in place. After 35 or 40 years, a tenant might no longer owe any rent at all...

Renting in a public-ownership building would be an option for the large number of middle-income individuals who lack the resources or the immediate desire to become homeowners.

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Proposing an Alternative To Renting or Owning a House: Publicly-Owned Housing

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  • by optikos ( 1187213 ) on Sunday April 18, 2021 @06:45PM (#61287812)
    This sounds like a public/nonprofit variant of the old British lease-hold (as opposed to the more American-style free-hold) way of occupying real-estate that was built by a new-build builder.
    • by ShanghaiBill ( 739463 ) on Sunday April 18, 2021 @07:03PM (#61287912)

      TFS says equity accrues to the renter, so no, this is not like a lease-hold.

      TFS is very muddled with no clear description of who is paying for this scheme, how "equity" is going to accrue, how the NIMBYs are going to be overcome, or even why the government needs to be involved in financing or running the rentals. Why not just issue more building permits to private builders?

      • by Richard_at_work ( 517087 ) on Sunday April 18, 2021 @07:13PM (#61287956)

        Something which has been a "thing" in the UK for some time now is the concept of "rent to own" in housing - you either buy a chunk of the property but rent the rest with an option to buy more chunks down the line, or you start accruing collateral in the property the longer you live there, and you have more rights than a standard tenant. The actual owner of the property is a special purpose organization which is intended to see its ownership share reduced over time.

        Eventually, you own the property - or you can walk away at any point in time and sell your share back to the SPO. But it means that you can have a fairly substantial fund built up while not taking on more responsibility than a normal tenant.

        • by Anonymous Coward on Sunday April 18, 2021 @07:28PM (#61287998)

          Something which has been a "thing" in the UK for some time now is the concept of "rent to own" in housing - you either buy a chunk of the property but rent the rest with an option to buy more chunks down the line, or you start accruing collateral in the property the longer you live there, and you have more rights than a standard tenant. The actual owner of the property is a special purpose organization which is intended to see its ownership share reduced over time.

          I can see these terms getting confusing right fast!
          The US has its own different thing called "rent to own" regarding housing. It is quite different from what you described in the UK.

          Here in rent-to-own, it is a form of lease, where your rent is higher to cover both normal rent and an additional amount goes towards paying down the lease.
          After so many years (5ish?) this extra amount paid more or less substitutes for the down payment on purchasing the property.

          That down payment is still for a mortgage. The idea is that rent-to-own is for people without credit and who wouldn't qualify for a mortgage.
          That extra rent paying towards a mortgage is what builds up their credit to enable them to get a mortgage once the rent-to-own period is up.

          Ideally anyway.

          Additionally, here the two parties involved are the tenant and the homeowner. The same types of people involved when outright purchasing a house. We don't have any form of special organization involved (not to my knowledge)
          You also don't get any extra rights than a normal tenant renting a property would have.
          I've heard of other risks involved with them too.

          I can easily see people in the US hearing the UK term but having a mental image of the US form, which is really not a great setup here.

          (Sorry if you already knew all of that.. but until your post I too would have assumed no difference in "rent to own" in other countries, so at least one of us learned today!)

          • Home ownership in America has only one problem: the availability of housing is limited by government restrictions on how much property can be built. The supply constraint keeps prices skyrocketing. Why? We have urban sized populations looking for suburban lifestyles. You can not house 300,000,000 people in 2500 sq ft houses on 1/4 acre property. Well, you could, but not with todays governmental restrictions.
            • by theshowmecanuck ( 703852 ) on Monday April 19, 2021 @10:24AM (#61290202) Journal
              300M people don't live exclusively in urban areas. You probably have an issue wondering how people voted for Trump as well. Less 50% of the people live in the east and west coast megalopolises. And in those states (especially on the west coast) there are plenty of suburban and rural homes. The United States is huge; even the lower 48. Don't let the Mercator projection fool you. There are a lot of people in the middle of the country, and they definitely don't all live in high density urban areas like New York, Boston, DC area, LA, SF. You sound like someone who buys into developers bullshit. Or are a real estate developer or part time real estate agent.
        • by ceoyoyo ( 59147 )

          Many islamic banks have a similar scheme because they're not allowed to lend money. If you want to buy a house, the bank buys it, and you rent-to-own it from the bank.

          It's mostly just equivalent to a mortgage except for terminology except that the customer has the ability to walk away with only the loss of the equity they've accumulated to date, rather than having to default or declare bankruptcy and lose everything.

      • by ceoyoyo ( 59147 ) on Sunday April 18, 2021 @08:42PM (#61288244)

        TFS is under the impression that in a normal economy owning the house you live in generates wealth. That has only been true since about 2003, and it's the reason nobody today can afford a house without risking total financial ruin (and economic collapse) if interest rates return to some kind of sane rate.

        The house you live in is, on average, a reasonably stable store of wealth, and the mortgages most people have make it a nice forced savings plan, so it does encourage stability. A house you rent to someone else can be a mildly profitable asset, but mostly because of tax deductions.

        A big part of the solution to the problem the first few lines of the summary discussed is realizing that the place you live cannot really accrue value at a greater rate than inflation because shelter is the biggest component of living expenses. That correction in the housing market will hurt, but it's got to happen sometime. Another part of the solution is recognizing that the 10%/year economic growth enjoyed by American boomers during much of their productive years is very atypical.

        • TFS is under the impression that in a normal economy owning the house you live in generates wealth. That has only been true since about 2003

          Err no, you have always accrued wealth in owning a house. That wealth simply is capped at the value of the house. 2003 hasn't changed anything other than being a point where barriers were so significant that a large portion of the population has been forced into a situation where they pay money *without* accruing wealth - i.e. paying rent and making someone else wealthy.

          The point of home ownership isn't to have a cash flow generating asset for 99% of people, even now.

      • with no clear description of who is paying for this scheme

        The question is not who is paying for the scheme, the question is who is not profiting. The entire equation looks to be identical to the normal purchase equation with the exception that the government has taken on the loan risk and the bankers don't profit on a difference in interest rates vs inflation. Ultimately the money still comes from the same place initially (government) and goes to the same place eventually (home owner equity) but with less skimming in the middle.

    • by Kisai ( 213879 )

      It's literately proposing a "co-op" model that already exists. The co-op model does require tenants to actually participate in maintenance activities, more incentive to take care of the property.

      The reason cities got out of managing rentals was entirely because they didn't want to maintain them, so they sold them off to private owners, who then raised rents as much as they could get away with, then sold the property to developers who didn't put it back into the public, but rather turned them into luxury con

  • Comment removed based on user account deletion
  • But would I still have to be a program writer for a respectable software company, have a social security number, pay my taxes, and help my landlady carry out her garbage?
  • What now? (Score:2, Insightful)

    by fahrbot-bot ( 874524 )

    "Renting is terrible. Owning is worse.

    [citation needed]

    ... the problem won't be solved by doubling down on homeownership; we've seen where that leads.

    Where's that?

    Not sure I understand what he's on about. My wife and I bought our 4 bdrm, 2.5 bath, 2,500 sqft (ranch) home on 1/2 acre lot, with an in-ground pool here in Va Beach in 1993 for $160k and I paid it off (early) in 2011 and it would list now at $465k. I was born in 1963 so am pretty close the start of Gen X. I'm debt-free. Live below your means, pay off your debts as soon as possible -- pay off CC every month -- don't buy stuff you don't need and save. Oh, and don't have ki

    • Re: (Score:2, Insightful)

      Comment removed based on user account deletion
      • There are plenty of places with cheap real estate which are going to see significant value increase over the next 5-10 years. All you need is enough for a down payment, stable income, and average credit.

        If you're in your late 20's with no kids and didn't blow your income on Good Times that should be No Problem, even if you've been working minimum wage jobs. Life is about choices and consequences, and while I don't mind helping people dig out from under their self inflicted problems I don't think they shoul

        • Combination of down payment and then making the montly note plus insurance plus taxes and then saving for whatever fixes need doing (A/C, roof, septic, well are all over $5k when something breaks it seems). Add in having enough discipline to not refinance/HELOC it out when it spikes in value to buy wasteful things

      • by Junta ( 36770 )

        I mean, similar story here, bought house in 2004 for $200k.

    • Re:What now? (Score:5, Interesting)

      by dskoll ( 99328 ) on Sunday April 18, 2021 @07:18PM (#61287970) Homepage

      $160K in 1993 to $465K in 2021 is an annual rate of return of about 3.89%. You'd have done way, way better putting that $160K in the stock market in an index fund that followed the S&P index. Even investing $160K in 2011 when you paid off your house would have yielded $657K, or $200K beyond your house's current value over only 10 years.

      From a financial perspective only, owning real estate is rarely a spectacular investment. What it can do is force people to save and build up equity rather than fritter away their money. A disciplined investor, however, is often better off renting in the long run.

      Here's a pretty good video [youtube.com] on the subject. However, in North America, home ownership is somehow treated as more virtuous than renting, and renters are looked down on.

      • Sure the ROI would have (probably) been better investing that money in the stock market instead of a house, but where would I have lived? As you mentioned, renting would have cost more and I would have ended up owning nothing. Over that time, I did also invest via my 401k and had other savings so the home equity simply adds to my net worth.

        Perhaps some of the problem is increased home valuations, but a larger part of the problem is that wages have been pretty flat or haven't kept up with inflation. That

        • by dskoll ( 99328 )

          You rent and invest what would have been the down payment. While rent may cost more than a mortgage, it is typically about the same as or less than the total cost of ownership of a house if you include property taxes and maintenance (the rule of thumb is to budget 1% of the purchase price for property taxes and another 1% for maintenance.)

          The video I linked to crunched the numbers (or maybe part 2 did; the video I linked was part 1 of a series.)

      • Yeah, but he can't live in his money market account, now can he. So was he suppose to live in his parents basement while investing monthly the money he used for that silly mortgage?

      • This isn't how you should do that calc. Most people generally don't have $160k to start off with - they have the 10-20% deposit to allow them to loan $160k.

        It's the leverage that makes you money. And banks don't loan you the same amount at low interest rates if you tell them you are putting the money in the share market rather than buying property.
        • by dskoll ( 99328 )

          "It's the leverage that makes you money."

          I don't quite follow that. Mortgage rates in 1993 were around 6 or 7% and as we've established, the annual rate of return on his house was about 3.89%. That's called losing money.

          Anyway, watch the video I posted (and the second video in the same series.) The guy crunches the numbers.

          • by ncc74656 ( 45571 ) *

            I don't quite follow that. Mortgage rates in 1993 were around 6 or 7% and as we've established, the annual rate of return on his house was about 3.89%. That's called losing money.

            Perhaps, but you have to live someplace. Which is better: "losing" some of your money to a mortgage (vs. what it might've earned invested elsewhere) or losing all of your rent every month? After 30 years (or less...I paid off my mortgage in about 21 years) of mortgage payments, the property owner has a place to live, free and cl

            • by dskoll ( 99328 )

              You're not following. In a lot of scenarios, you'd end up with more money by paying rent and investing the savings from not having to make a downpayment, pay property taxes, or maintain a property in the stock market.

              Unfortunately, few people are disciplined enough to do that.

          • OK, I watched the video. He obviously has a barrow to push. Talks a lot about the unexpected costs of home ownership (and completely ignores that house insurance covers the "accident" costs), but doesn't consider at all any of the unexpected costs of renting: having to move whenever an owner sells the place, losing bond whenever one of your kids does damage to a wall, etc, etc.

            So his analysis that home ownership has all these costs, but renting is a sterile transaction where you can stay in the same plac
            • by dskoll ( 99328 )

              It depends where you rent. If you rent a house from a private person, sure... there's the danger of having to move if the owner sells the place. That exact thing happened to me recently.

              But if you rent from a corporation whose business is renting properties out, that is not going to happen. And at least where I live (Ontario, Canada), tenants have a lot of rights and it's very difficult for landlords to just kick you out for no good reason (and doing fake renovations so you can raise the rent would def

      • by ceoyoyo ( 59147 )

        What you say is true, except since 2003 when the housing market in most places went insane. The OP is either mistaken about his house's current value or he really made a bad investment, because most real estate has appreciated a lot more than that, all in the last 15 years or so. That's why it's unaffordable.

        The 2008 crash in the US reset things a bit, but then unrealistic valuations just kept trucking back on up. Here in Canada it did not reset in 2008, so things are even more over-valued.

        • by dskoll ( 99328 )

          That's true. The Canadian market is insane. I actually do own my own place now, but that's despite the financial analysis, not because of it.

          The Canadian bubble has to burst at some point. House prices here are completely unsustainable. The very first house that I bought back in 1992 cost about 3.25x my annual salary. The house I bought recently would cost probably 8x the salary of someone just starting their career, and that's if they're in a good career.

      • by Junta ( 36770 )

        When I bought my house, the amount I had to pay off was set. I did pay it off, it was a purchase, not an 'investment'.

        If I was renting, I would be at the mercy of the landlord hiking the rent.

        So from a financing perspective, though it may not be the best return, it does get rid of a huge expenditure when it is paid off and limits your ongoing liabilities in the event of a boom real estate market.

    • 1993 for $160k and I paid it off (early) in 2011 and it would list now at $465k.

      Yeah, this is kind of the problem.

      My parents bought their property in the UK in 1997 for £45,000. A nice, tidy, 3-bed semi-detached modern build with a nice garden in a nice area.

      By the time I was looking for property around 2005, the cheapest equivalent to what my parents bought was a 2-bed semi-detached in the same area, and they were going for £125,000.

      When my parents sold their property in 2014, it went for £205,000.

      Theres nothing in the area for £45,000. Studio apartments go f

      • by dskoll ( 99328 )

        I'd imagine that £205,000 in London would get you a third of a parking spot, if you were lucky.

        The problem in many places (certainly most cities in Canada, where I live) is lack of housing supply along with opaque information. For example, houses in cities in Canada nowadays generally receive multiple bids, but bidders can't know what the highest current bid is. So people who really want the house tend to overbid. Real estate agents love opaqueness because it increases their commissions.

        As an e

        • The lack of housing is definitely an issue, but its not always the driver - the same town Im talking about doubled in size during the same period, but that doubling didn't slow down the house price rise at all.

      • Where I live a two bed maisonette is £200-£220. Three bed is £350-450k. Four bed £500-600k. Weâ(TM)re still stuck with a mortgage being 4x your salary. Average wage of around £30k will only get you £120k, even in rough areas you wonâ(TM)t find a decent home that doesnâ(TM)t need any work done to it for less than that, on top of needing to raise at least 10% deposit. Only positive is interest is low at the moment. Renting,

        • Renting, you're paying 50% more than you would if you were paying off a mortgage.

          Yup, and theres a very good reason for that - the property owner is responsible for basically anything going wrong with the property, plus taxes etc.

          Since moving from the UK we have been renting our UK property out, and yes the rental rate is about 40% higher than the mortgage we have on the property. But lets break down some of the things I have to pay when I dont have to pay when occupying the property:

          * Income tax on the rental income - theres no relief for just covering the mortgage, that was ended a w

      • 1993 for $160k and I paid it off (early) in 2011 and it would list now at $465k.

        Yeah, this is kind of the problem.

        Increased home valuations may be part of the problem, but I think I read that wages have been pretty flat over the years and, if so, this prevents people from saving and affording a home. The rich get richer, the poor get poorer and the middle are stuck or trending downward ...

        • The rich get richer, the poor get poorer and the middle are stuck or trending downward ...

          This is too simplistic - my wifes family were *poor* when she was growing up. Both parents made redundant multiple times in the 70s and 80s, living in council housing, never had new clothes etc.

          In the late 1980s they had scrimped enough together to start taking part in the "right to buy" sell off of council property - you could buy the council property you were in at a fairly decent price, with a government backed mortgage. So they could pick up a 3-bed council property for around £25,000 around the

    • Re:What now? (Score:5, Insightful)

      by Actually, I do RTFA ( 1058596 ) on Sunday April 18, 2021 @11:36PM (#61288728)

      Where's that?

      I think this is a 2008-crash reference.

      Not sure I understand what he's on about

      Wow, you missed the point Yes, as a (baby) baby boomer, things worked out great for you. That's (part of) the point of the article. When you say "I bought this for $160k and now it's worth $465k, things are great" you sound like "I bought bitcoin at $5. It's now $60,000. Things are great".

      The World You Grew Up In Is Gone

      Your house purchase price was around the national average and took the average family less than 18 years to pay off. (Wow, you couldn't have hit the average numbers more exactly.) Now, more women are in the workplace so the average family has two incomes and it now takes the average family 27 years to pay off a house. (And yes, both are based on the traditional percent of your household income, not how long it actually takes) Similarly, when you went to college a minimum wage job could pay for (public school) tuition at 20 hours/week. Now, it takes 73 hours/week (again, for public school). Which doesn't leave much time for class, what with you working more than 10 hours/day.

      If you wonder why the phrase "ok boomer" started trending, it's because your (condescending) advice is no longer relevant. And because you act as though it was your good decisions and not circumstances that led to where you are. By the time your generation was where the millennials are, you owned 4.4x as much wealth. Do you think that's because of avocado toast, or because your parents heavily subsidized things like your tuition and then you didn't pay it forward?

  • Rent to own (Score:4, Insightful)

    by RobinH ( 124750 ) on Sunday April 18, 2021 @06:55PM (#61287858) Homepage
    This is just called rent-to-own, and is another good way to keep poor people poor. The root cause of this problem is that we're building fewer houses now than we were in the 70s and there are more people looking for houses now. That's a result of policy decisions. Nobody wants poor people in their area, so no cities or towns councils approve housing that poor people could afford to buy. It's by design.
    • This is just called rent-to-own

      TFS says "fair market rent". Rent-to-own means you pay above-market rent to accrue equity.

      So some extra money just magically appears from somewhere (most likely the taxpayer) and makes everything work.

    • In most cases, the real problem has become the cost of k-12 education. Because the cost of educating one student is often more than the tax revenue from a home, towns do everything they can to discourage families moving into town. Zoning rules have resulted in McMansions only, with even "affordable housing" being out of reach of the cost to the average young family starting out. Rules require at least an acre of land, huge fees to attach to utilities, and discourage multi-bedroom apartments (to limit ap
    • by bosef1 ( 208943 )

      I want to say I remember seeing an article that explained that, for builders, not only can they make more profit selling larger, more luxurious (and expensive) home on a purely proportional basis, but the margins on luxury components are larger, so they make an even greater fraction of profit for luxury homes. So even if they have complete freedom on what to build in a lot, they are incentivized to build larger, more-luxurious homes, right up to whatever the market will bear.

      Builder and developers will sur

  • by Papaspud ( 2562773 ) on Sunday April 18, 2021 @06:56PM (#61287862)
    People who don't own, don't take care of stuff, just the way it is. How many housing projects going up and then having to be tore down does it take? Look at what they are doing in So Cal...tent apartments that only cost 100K$ each bed, great value.
  • Please explain (Score:5, Insightful)

    by Nkwe ( 604125 ) on Sunday April 18, 2021 @06:56PM (#61287868)
    From the summary:

    and the problem won't be solved by doubling down on homeownership; we've seen where that leads.

    Where does/did this lead? I am not agreeing or disagreeing with the statement, I don't understand fully what it refers to. The article doesn't clearly support the statement or really explain it.

    • Re:Please explain (Score:5, Insightful)

      by fahrbot-bot ( 874524 ) on Sunday April 18, 2021 @06:58PM (#61287884)

      From the summary:

      and the problem won't be solved by doubling down on homeownership; we've seen where that leads.

      Where does/did this lead? I am not agreeing or disagreeing with the statement, I don't understand fully what it refers to. The article doesn't clearly support the statement or really explain it.

      It leads away from his thesis.

    • Why not just explain the system without the op-ed. I hate this kind of stuff.
  • by sinij ( 911942 ) on Sunday April 18, 2021 @07:02PM (#61287898)
    My understanding that this is how reservation housing works. Unless you or someone that could kick you out own it, nothing gets fixes and it turns into slum very quickly.
  • Buy a really nice 5th wheel or tiny house every 10-15 years and bank and invest your money if kids aren't on the table.

    If you finally get enough to throw down on some land then do it and just add a garage sized cement pad, add a pre-fab covering, dig a well, install electric and sewage and sidestep a house completely. Now you can have your cake and eat it too...

  • No stake in it (Score:5, Insightful)

    by WoodstockJeff ( 568111 ) on Sunday April 18, 2021 @07:08PM (#61287934) Homepage

    Having known a few landlords in the past (not ones stuck with "city" properties), there's not a lot of "getting rich". Renters don't care about what they rent, beyond getting back their security deposit, Having to do thousands of dollars in repairs each time the renter changed doesn't leave you rich.

    Now make the government the landlord. Governments notoriously don't give a crap about anything outside of the "show place" parts of town. As mentioned before, we have had government owned-and-run rental housing over the decades, and most were torn down after they proved to uncontrollably BAD.

    But, each generation thinks they can do what failed before, better than the last generation, or they've simply never learned about how bad things got, so it seems so wonder this time.

  • So your rent gets you a home AND something more (equity). So, all else equal, the rent will be *higher*.

    With a normal rental at market rates, you can invest the extra money in *whatever you want*. So a normal rental is strictly better.

  • They make lots of easy money lending people ever-larger amounts to go out and bid against each other with. The more they lend, the more they make.
  • n/t
  • by FeelGood314 ( 2516288 ) on Sunday April 18, 2021 @07:34PM (#61288018)
    If just New York, San Francisco and San Jose would relax their zoning laws and allow more high density, low rent apartments to be build the entire USA would see a 4% increase in GDP. https://www.economist.com/lead... [economist.com] That is how screwed up our housing markets are. Where I live In the high tech park of Kanata, Canada I would describe zoning as malicious, corrupt and abusive. Lack of affordable housing means people can't move to where good jobs are. It is terrible for young people. Buy also sucks. You lose the ability to easily move and become much more risk adverse. In Canada renters are actually much more likely to start a business than home owners. We know the problems with housing. And it isn't corrupt, stupid politicians it's the voters who elect them. And I don't know how to fix stupid.
  • by 140Mandak262Jamuna ( 970587 ) on Sunday April 18, 2021 @07:38PM (#61288024) Journal

    But our current model of renting — a lifetime of uncertainty only to make someone else rich — won't do the job either.

    This is just an assertion stated as fact without serious persuasive argument that it is true.

    Owning a house ties you down to one geographical location, limiting your jobs search and other career options to what is possible by you living in one particular address. It becomes particularly sub optimal for a couple with two specialized degrees. If you just rented, without owning the home/apartment, you can move where the jobs are. If one wants to leave the job for personal time or getting a degree to change career path, home ownership would weigh you down heavily.

    The 30 year fixed mortgage "innovation" is basically allowing ordinary people to acquire something with a leverage of 1 to 4. You pay 20% down, but get 100% of the appreciation of the asset, 1 to 4 leverage! Such a leverage was available to common man only through home ownership and asset backed mortgage. I was an immigrant then, took on a 1 to 10 leverage to buy a home in 1998, without paying Private Mortgage Insurance. ( I used to listen to the radio program by Bruce Williams, Shocked to learn so many Americans who have lived in this country since birth, older than I am did not know about taking 80% primary mortgage, 10% secondary mortgage to get 1 to 10 leverage without PMI! I learned how ill informed most people are by their questions. Landed in America in Aug 1990, that weekend newspaper ad section had private check printing for 6$ for 200 checks. I knew enough to decline the bank's offer to print my checks for 20$ for 200 before I even opened an account in Sun Trust Savings, TX.)

    But now the investment opportunities have multiplied. Stock trading, even option trading is possible for ordinary people. In 1995 Schwab gave me 45$ commission trade, considered a discount brokerage for giving such cheap trade while the full service brokerages charged 149$ per trade. The lessons and truisms of that age, "Take the biggest housing loan the bank is willing to give you and pay down the mortgage diligently, you will retire rich" is not true any more. Rent, dont own, invest the money you save for the long term in the stock market. Pledge the stocks to borrow and trade and get some small prudent leverage, not 1 to 4, but decent like 1.5 or so. There is no guarantee this will beat real-estate, but it is not like there is no other opportunity for the common man.

    Disclosure: I own rental properties and REITs. Simply stated if more people rent, my income from these assets will increase.

    • The problem is that if you do buy a house, you can just sell it at a inflated rate down the line, and move.
      Nothing more, and nothing less.
      Easy.
      Difference in price could even outscale the rent on the mortgage.

  • Renting carries certain intrinsic advantages over ownership, for individuals as well as society. One is flexibility, and the access to opportunity that accompanies it. Think of a woman who buys a home in one part of town, takes a new job in another area a few years later, and is then stuck with a 90-minute commute, or of a man who turns down the better job because he doesn't want to sell his home or be saddled with a long commute.

    I thought we specifically made home ownership easier so people would "settle down" and create a more stable society? And with so many companies switching to full time remote now isn't this far less of an issue than it was historically?

    Renting offers diversification of risk. Renters are able to invest their resources in a wider array of assets, and they arenâ(TM)t stuck holding the bag if their regional economy dries up and home prices fall.

    Sure, while building zero equity. I realize there was a housing crisis but let's not throw the baby out with the bathwater. For basically most of US history homes have been an incredible investment. It's just a matter of timing.

    I bought my house in 2007. If I had sold

  • by physicsphairy ( 720718 ) on Sunday April 18, 2021 @07:51PM (#61288064)

    the equity would accrue to the tenants, minus the cost of operating and maintaining the building, administrative costs, and so on

    I'm sure everyone wants to have their finances tied to how effectively a government program can manage its cost overruns.

    • by green1 ( 322787 )

      Yes, but can the tenants have negative equity? Because there options on this are:
      - Negative equity
      - Higher cost than market rate
      - Taxpayer subsidized

      What they really don't want to tell you is that it's the third option they're banking on.

  • by biggaijin ( 126513 ) on Sunday April 18, 2021 @07:55PM (#61288086)

    The only difference between this scheme and the current low-income housing projects is that everyone would be eligible to get an apartment. Because "everyone" owns these properties, no one owns them. None of the occupants feel any pride of ownership and they do not maintain the property. Have you every visited one of the projects in Chicago, or St Louis, or New York, or Detroit? I am not interested i having the government take responsibility for the place I live, thank you.

  • by GlennC ( 96879 ) on Sunday April 18, 2021 @07:57PM (#61288088)

    I read the article, and the only evidence that "ownership is worse" is a reference to mortgages that are "underwater," or that the property's value is less than the amount owed.

    To me, that is a risk that can be mitigated by doing sufficient research on neighborhood prior sales, having more than a minimum down payment, and trying to get the best loan rate possible.

    I realize that many Gen-X and Millennials are probably not now, nor may ever be in a position to own a home. This plan may in fact be a good thing for many people, but let's not go around making up excuses to pump up what appears to be an expansion of public housing.

  • As someone who didn't and doesn't need this kind of solution, man will I say that it is absolutely brilliant. It has my full support.

    This is certainly the kind of thing that improves communities, of all kinds. It'll improve traffic and transit too.

    Time for me to put my money where my mouth is. Clicking the link now.

  • Since there is no higher power than the government in this country, they are or the people they choose will be the landlords for this new cockamamie called publicly owned housing. And we all know how well the government manages money. Some cronies of the people in power will get paid for doing nothing while the so called public-owners paying their exorbitant salaries to live in crumbling housing. If you don't want to believe in this premise look at the US highways. There is a DOT to take care of them along
  • In Australia we have compulsory superannuation. The most important purchase a person makes is their home. The difficulty is raising capital for the deposit for that first home. The biggest saving a person can make is not paying a lifetimes rent.

    Put these all together and it is a no brainer to use super to pay the initial deposit. When you finish paying off the home put extra into super to 'pay back' the mortgage deposit.

    There is also a call for super funds to lend for home loans to benefit members, it is an

  • I bought wisely, paid off my modest rural homes and love the extremely low overhead coupled with control over my property.

    Tenants are far less free to use their quarters as they see fit, while ownership confers great advantages and comforts. Tenants are stuck with other tenants and suffer from having to share spaces.

    When you own you (if you chose accordingly) are free to do much more than a tenant. When I wanted more workshop space I built it. When I wanted to raise chickens I was free to do that. I can tar

  • > "Renting is terrible. Owning is worse. A third option is necessary," argues a recent article in the Atlantic, "a way to rent without making someone else rich."

    Lol how about buying it and then rent it to yourself, to make yourself rich? Oh wait you said that was worse.

    Or maybe we could stop using zoning laws to forbid people from building affordable houses because that would stop houses from appreciating in value (also known as becoming increasingly unaffordable).

  • For apartments, you could rent an empty shell, and fit it out yourself, as is common for commercial leases.
    Rents would continue to be set at the market rate for an an empty apartment.
    When moving, you could sell the rights for an amount that should correspond to the value of your improvements.

    Or look at the successful model in Singapore, with 99 year leases:
    https://en.wikipedia.org/wiki/... [wikipedia.org]
    Though I'm not sure how well the racial quotas in building would be accepted in the US.

    For houses, people want to own, a

  • Here in Bay Area we have many co-ops that will buy the house from a pool, and let you "rent to own". For Muslims who want to avoid paying interest, for example, this has been a good choice for a long while.

    And others do this too.

    Don't present ancient ideas as if they were new.

    (Also lack of equity in housing is more of "by design". Old houses in Cupertino are listed for $2,000,000 while the owners only paid 10% of that. By restricting new housing they made sure to reap all the benefits of the decades long gr

  • The article is a tripe "what if" starting off with the flat statement that renting is bad and owning is worse".

    Having both rented in my life (who hasn't) and owned, I can agree that renting isn't ideal but being able to simply call for a repair is quite nice vs having to have the resource to make the repair your self.

    It cost me quite a lot of money in the near past to deal with a water main leak on my side of the meter. And it points up a problem with this "what if " proposal. SOMEONE has to maintain fund

  • by King_TJ ( 85913 ) on Monday April 19, 2021 @12:20AM (#61288852) Journal

    I know from watching my dad try to invest in several 4 family units to rent out; it's not that easy to "get rich" by becoming a landlord. I also know ONE guy who did become a self-made millionaire as one, but it took him a good 35 years or so of continually reinvesting earnings in new properties and a lot of labor doing his own repairs to them. (He had only a high school education and someone started him on the path to making money with rentals when they gave him the opportunity to buy one really cheap if he fixed it up himself, and paid them back over time.) He just focused on that goal continuously from there, not knowing anything else he could do to make a living.

    With renting, everyone wants to look at it from the renter's angle. They pay all this money out to temporarily live in a place that's not theirs, and when they move out - they have nothing to show for it. The thing is though? It costs a lot of money to maintain a roof over one's head, and too many people just don't want to face that fact after growing up to adulthood under the roof of parents or guardians who covered all of that for them.

    The last time I rented a townhouse apartment, it was as part of relocating to a new city for a job. The monthly rent was about $200 less than what I wound up paying a year later on my mortgage when I bought a house in a city nearby. But the guy I rented it from was still trapped in a mortgage of his own on that townhouse, which he unfortunately purchased at a high point in the housing market. I did a little research and realized my rent was only netting him about a $75-100 a month profit after covering his cost for his mortgage. And while I was there, a major repair was required to the master bathroom. (Shower stall had to be torn out and replaced.) So there's a good chance that wiped out ALL the profit he made on me the whole time I stayed there.

    So yeah -- this assertion that renting is categorically "terrible" for renters and a new housing model is needed? I'd say that's pretty questionable, since by and large, the cost of rent accurately reflects what it really costs to hold onto and maintain the rental property itself. Renting at "market rates" under this new model would, I think, wind up where people were still asked to pay about the same amount of rent they do from a traditional landlord who owns the property currently. Any discounts below that price would be reflected by a lack of willingness to perform maintenance/upkeep. (Don't forget, these rental properties need to be insured too. Renters usually only pay for cheaper "renter's insurance" that covers what they own ... not damage to a property itself if it burns down or what-not.)

If A = B and B = C, then A = C, except where void or prohibited by law. -- Roy Santoro

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