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Source link: http://archive.mises.org/16011/how-real-estate-came-to-own-us/

How Real Estate Came to Own Us

March 14, 2011 by

Cheap money, buyer tax incentives, lack of new supply, nothing seems to keep home prices elevated. FULL ARTICLE by Doug French

{ 16 comments }

HL March 14, 2011 at 10:45 am

Bankruptcy is the answer! Not just for individuals, but for states and, in an ideal world, for the US of A.

J. Murray March 14, 2011 at 10:53 am

“And so it began, the federal government’s agenda that Americans not be beholden to greedy landlords but be strong independent owners of property with no one to answer to but God, the local tax authorities, and the mortgage lender (whose investment was guaranteed by FHA).”

And the zoning board. And the lisencing commission. And the environmental commission. And the water authority. And the…

You know, I think I’ll keep being a “rent slave”. I have more freedom that way.

Wandering Cynic March 14, 2011 at 4:50 pm

“You know, I think I’ll keep being a “rent slave”. I have more freedom that way.”

Can’t argue with that. When something breaks in my apartment, the landlord sends up a repair crew and he gets the bill. When the grass needs cut or the parking lot repaved, the landlord is on the hook for it.

The homeowner, who is doing nothing more than renting his land and home from the state, pays for every repair and improvement out of pocket. Meanwhile the state “landlord” sits back and rakes in the cash for the wonderful service of not booting the “owner” into the street at gunpoint if his rent is late.

Not to mention if I’m booted out I lose nothing or at worst a $750 security deposit. The home owner is on the line for a six figure debt and just lost all the equity and work he put into the home.

Jim March 14, 2011 at 5:12 pm

You know, I hear this from a lot of people, but my renting experiences were NEVER like that. Every place I ever rented (and it was quite a few, all through my college years and then for about 5 years afterward), the property management would be slow to send people for repairs, the repairs would be done as cheaply and shoddily as possible, the utilities were always through the roof (paper thin walls and glass), etc. And anyplace that wasn’t like that, was priced higher than a mortgage payment (including escrow and maint.).

Now we live in the Dallas area, so there was never a big run-up in home prices here. But I’m paying less each month right now for a 1,700 sq. foot home than I was for an 1,100 sq. foot apt. Add in the cost of my lawn service, and it breaks about even. Sure, I have to do some work once in awhile, but when the a/c blew up, and I replaced it at my own expense, it was worth it to me because I got the unit I wanted, used contractors I vetted, and had the job done right, the way I wanted it done (as opposed to whatever random dude the landlord would send to “fix” the problem as cheaply as possible). I can’t even imagine going back to renting.

HL March 15, 2011 at 12:00 am

You must have lived in the South, where “shoddy” is a way of life. [I love the South and am glad we conquered it] Coming from the big apple, I have fond memories of excellent service by dedicated craftsmen employed by caring landlords. The house I rented for a while out West belonged to some Chinese lady who basically told me to hire whomever I wanted for repair jobs and deduct it from the rent. Worked out well. She got quality repairs and I got peace of mind.

Anyway, there is something to be said for owning your place, for sure. But like anything good that is touched by the devil or government, it turned from virtue to vice in a jiffy.

Andy March 15, 2011 at 2:35 am

HL, shoddy must be a way of life in Indiana as well. My experiences with renting have been similar to Jim’s.

J. Murray March 15, 2011 at 6:34 am

I’m renting in Florida. The housing prices are still grossly overinflated here. And because of the giant glut of rental properties under construction or empty, management companies are falling over themselves to keep me happy. Negotiated a big cut in monthly rent payments and I typically get someone over here the next day when something goes wrong.

Andy March 15, 2011 at 2:25 am

My house payment never goes up. Isn’t that more advantageous in terms of inflation? My housepayment is essentially decreasing over time. Indiana has a property tax cap at 1% of value. My only increase has been from the insurance required by the mortgage company. I imagine your landlord has to keep up with repair costs the same way my insurance company does. (And inflation)

J. Murray March 15, 2011 at 6:35 am

I’ve negotiated my rent downard for the past three years straight. Multi-family units are falling under a new bubble. Housing in general is overbuilt, especially in my area, so I have plenty of leverage to keep the monthly check going downward.

billwald March 14, 2011 at 1:33 pm

Except for the people who have recently lost jobs I can’t see those who put 20% down on a house they could afford because they wanted a place to live will be hurt. OK, some bought into developments that went bankrupt and got screwed. Probably a good argument to buy used in an old neighborhood.

RNN March 14, 2011 at 2:39 pm

I’ve always wondered, “How is one classified as ‘a homeowner’ when that person has no equity in the deal? When you pay nothing down on a house, you are nothing more than a slave to the banking system.

Andy March 15, 2011 at 4:15 am

Do some research on Silver State Bank and Doug French’s involvement. It may offer some insight into his anti regulation stance and the REAL premise behind MI.

Real Estate Manhattan March 22, 2011 at 9:00 am

it is nice for other and helpful.

billwald March 22, 2011 at 12:19 pm

I could rent cheaper but prefer the psychological sense of security produced by owning dirt and the house on it free and clear.

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