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PaperclipPerfector  1yr ago (text post)   28122 thread views

Culture War Roundup for the week of April 15, 2024

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Older people don't care so much and are happy to see their property values rise (property values have risen far out of proportion to incomes in recent decades)

Is this actually true? Where I live the boomers are mostly upset about how the increase in housing costs is affecting young people, with blue tribe boomers thinking it’s unfair and red tribe boomers thinking it delays growing up, and there’s a near universal consensus that taking the hit to property values is worth it to reduce housing cost.

In my experience, boomers are very keen on the rising value of their house, and also upset that their children can't get on the property ladder. Falling property prices in London are met with horror and fury.

In other words, they generally don't connect "the rising value of my house" to the immiseration of young people.

IME boomers understand the connection. They just don’t aren’t keen on being the sacrificial penguin to try to solve the problem- it’s a coordination problem.

The latter informs the former, though. I'm not saying they're literally too stupid to understand, they just won't explicitly think about the connection between the money they're hoping to get for the house and the money young people are spending on housing unless pushed quite hard.

I’ve also seen plenty of old people complain that the concomitant rise in property taxes is increasingly burdensome, especially for those on a fixed income. Sure, their kids may see more money when they die (realistically, the nursing home will probably eat most of the proceeds), but that does nothing to help them here and now.

The rise in property taxes has nothing to do with the rise in property values, and everything to do with bloated & useless municipal governments spending beyond their means. If more boomers understood this, maybe we would have less cities run like Toronto and Vancouver.

Yes, there is no reason why am increase in property values should mean an increase in property taxes. Cities don't need more money just because property values are higher. They should fall and as a percentage of property values when property values rise.

In some sense that’s true, but as long as property taxes are based on a certain percentage of a property’s assessed value, when that value goes up, the taxes do too. Obviously the government could lower the rate, but inertia makes that unlikely.

They do it yearly around here -- property values have about doubled since 2020, and I can assure you that municipal budgets have not. It's more like 'create a (bloated) budget and divide by total assessed values; everyone pays that percentage' than 'multiply assessed values by X% and bloat the budget to match'.

Either you live in a very unusual place, or are suffering under a very common misconception of how property taxes work:

https://www.mpac.ca/en/UnderstandingYourAssessment/PropertyAssessmentandPropertyTaxes

In New Jersey and many other US states (not California, and I have no idea about Canada), property taxes are NOT based on a percentage of property's assessed value, though they are expressed that way. Instead, a municipal budget is constructed and the revenue required for that budget apportioned among the properties according to their assessed values. Doubling all the property values uniformly without changing the municipal budget would not change property tax; it would halve the tax rate.

My experience is that most people don't have a good enough understanding of how housing costs work to point blame at anything other investment funds for high prices.

You’re correct- the reasons for high housing costs are not well understood. But boomers are still not rejoicing gladly at them.

What do you mean by “not well understood”. Do you mean economists do not understand why or the average guy doesn’t understand why.

I think economists would easily cite things like land restrictions, failure to build infrastructure, zone restrictions etc as the cause of high home prices.

The average person blames things like foreign buyers, investors, and AirBnb which have almost no effect on property values, instead of high labour costs and regulations that restrict housing supply.

Yup it is rampant on all my local news pages and subs. It is also high material prices. They have almost all doubled or more in the last 5 years.

One issue that I've heard from friends and relatives who have had to hire contractors lately for construction and renovation work is that they are extremely unreliable. They will just drop a job at the last minute even though they agreed to do it and the rest of the project depends on them doing it. This has caused people to have to scramble at the last minute and go around begging people to help them out or it has delayed projects by months.

Part of it is the nature of the work. Contractors need to juggle multiple jobs to remain employed full time, often for the very reason you just mentioned, other contractors not showing up. This creates a cycle of delays and cascade failure states that need to be resolved on every single jobsite.

Average people don’t understand why housing costs are high.

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