It is impossible to defend democratic rights or any of the social interests of working people without seizing the unearned wealth of the billionaire parasites.
Why do people keep saying that I can’t get that money out of the house?
I can use the equity as an asset to borrow money at low interest rates compared to unsecured loans.
In which case, you owe more than you borrowed. The net result of your borrowing is handing money to oligarchs. That makes them the problem, not you.
I can sell the property and move to a lower cost of living location, or even just a smaller home if I wanted.
Proportionally, you are not making any gains when you do that. That smaller home’s value increased at the same time your own home did.
I can rent part of the property out at a rate commensurate with it’s current value.
In which case, you would then be leveraging your wealth to strip others of wealth generated through labor. You would become part of the problem class with this approach.
Your ownership of an appreciating asset is not the problem.
Rich people borrow money at low rates all the time, in order to make larger returns on other investments.
If I borrow 500,000 at 4%, and then invest it, I can make a lot of money. For example, If I had borrowed against my property in 2024 and invested it in the S&P 500, I would have made a 22.3% return, minus the 4%, so 18% profit on the value I pulled out of my house. There’s obviously risk involved, but this is not an uncommon practice.
You can even re-invest it in real estate itself by borrowing the money to buy more properties.
Proportion doesn’t matter at all, If I had bought a million dollar house, and sell it for 1.7 million (70% increase) and downsize to a $600k house that went up to $1020k (also 70%) in that same time, I’ve made 700-420=$280k more than if I had just bought the smaller house to begin with, minus a bit of interest difference (much less than the $280k)
You say that renting it out is the problem, but both of the options above are also generating money by stripping wealth from other people (whoever buys the house, or whoever is buying houses that cause my house to appreciate in value)
Housing appreciation IS the problem, without housing appreciation, housing wouldn’t have become unaffordable in the first place and we wouldn’t be complaining about the current cost of living issues.
In order for us to have affordable housing, property cannot appreciate faster than wages. Otherwise over time, it will ALWAYS become unaffordable.
Housing appreciation IS the problem, without housing appreciation, housing wouldn’t have become unaffordable in the first place and we wouldn’t be complaining about the current cost of living issues.
In order for us to have affordable housing, property cannot appreciate faster than wages. Otherwise over time, it will ALWAYS become unaffordable.
I don’t think you’re wrong here, but I need to let this sink in after a nap.
It’s a very fundamental concept that almost everyone is missing.
If houses increase faster than wages, the price of them relative to incomes will slowly go up forever making them less and less affordable.
If housing prices go up less than wages (or even go down) then the people owning the houses are losing money each month, but the housing costs will stabilize at a price level that is balanced by how much money people are willing to lose each month just to have a home.
The second option isn’t as bad as most people think, it’s how cars work right now. You’re willing to buy a car and spend money each month because it benefits your life, not because it gives you money back.
How do we achieve prices going up less than wages? There are about a dozen different possible ways for the government to do it. Options include the Government owning all land and just renting/leasing it to people instead of selling it, putting a 100% capital gains tax on the land (not the buildings), or my personal favorite which is a yearly land value tax (not a property or building tax) and using that revenue to pay for a basic income leaving a net zero tax change for a person who uses an appropriate amount of land for a given area.
In order for us to have affordable housing, property cannot appreciate faster than wages
Finally, you’re approaching the actual issue. Appreciating assets are not the problem. Wage stagnation is. The working class is having too large a share of its productivity diverted to the Problem Class.
I mean, wages have been increasing at a fairly reasonable rate related to inflation, the cost of most things have gone down relative to incomes with the big exception being housing.
In which case, you owe more than you borrowed. The net result of your borrowing is handing money to oligarchs. That makes them the problem, not you.
Proportionally, you are not making any gains when you do that. That smaller home’s value increased at the same time your own home did.
In which case, you would then be leveraging your wealth to strip others of wealth generated through labor. You would become part of the problem class with this approach.
Your ownership of an appreciating asset is not the problem.
You really don’t understand finances at all.
Rich people borrow money at low rates all the time, in order to make larger returns on other investments. If I borrow 500,000 at 4%, and then invest it, I can make a lot of money. For example, If I had borrowed against my property in 2024 and invested it in the S&P 500, I would have made a 22.3% return, minus the 4%, so 18% profit on the value I pulled out of my house. There’s obviously risk involved, but this is not an uncommon practice. You can even re-invest it in real estate itself by borrowing the money to buy more properties.
Proportion doesn’t matter at all, If I had bought a million dollar house, and sell it for 1.7 million (70% increase) and downsize to a $600k house that went up to $1020k (also 70%) in that same time, I’ve made 700-420=$280k more than if I had just bought the smaller house to begin with, minus a bit of interest difference (much less than the $280k)
You say that renting it out is the problem, but both of the options above are also generating money by stripping wealth from other people (whoever buys the house, or whoever is buying houses that cause my house to appreciate in value)
Housing appreciation IS the problem, without housing appreciation, housing wouldn’t have become unaffordable in the first place and we wouldn’t be complaining about the current cost of living issues.
In order for us to have affordable housing, property cannot appreciate faster than wages. Otherwise over time, it will ALWAYS become unaffordable.
I don’t think you’re wrong here, but I need to let this sink in after a nap.
It’s a very fundamental concept that almost everyone is missing.
If houses increase faster than wages, the price of them relative to incomes will slowly go up forever making them less and less affordable.
If housing prices go up less than wages (or even go down) then the people owning the houses are losing money each month, but the housing costs will stabilize at a price level that is balanced by how much money people are willing to lose each month just to have a home.
The second option isn’t as bad as most people think, it’s how cars work right now. You’re willing to buy a car and spend money each month because it benefits your life, not because it gives you money back.
How do we achieve prices going up less than wages? There are about a dozen different possible ways for the government to do it. Options include the Government owning all land and just renting/leasing it to people instead of selling it, putting a 100% capital gains tax on the land (not the buildings), or my personal favorite which is a yearly land value tax (not a property or building tax) and using that revenue to pay for a basic income leaving a net zero tax change for a person who uses an appropriate amount of land for a given area.
Finally, you’re approaching the actual issue. Appreciating assets are not the problem. Wage stagnation is. The working class is having too large a share of its productivity diverted to the Problem Class.
I mean, wages have been increasing at a fairly reasonable rate related to inflation, the cost of most things have gone down relative to incomes with the big exception being housing.
https://cepr.net/publications/in-the-good-old-days-one-fourth-of-income-went-to-food/ https://www.jchs.harvard.edu/blog/home-price-income-ratio-reaches-record-high-0
Based on that, I’d say you’re wrong that it’s wage appreciation that’s the issue, it’s definitely housing costs that are the problem.