Why Kamala cannot get rid of obstacles to lower home prices
Posted by John Reed on
Kamela wants to make it easier to buy your first home. Among other things, she is going to give first time home buyers $25,000 for down payment money. Many on TV say that money will go to the sellers who will all raise their prices $25,000.
.
It that true? Roughly yes.
.
The PITI to buy a home stems from the price and mortgage interest rate. She is NOT doing anything to the interest rate. They are generally set in world markets.
.
How do you reduce the home prices? Supply and demand set all prices. The only way to lower home prices is to build a lot of new homes, more than are currently being built.
.
You probably took Economics 201, actually more likely than the oft named Econ 101. It was probably an upper class level course. But let me now give you a little Econ 301.
.
Demand is a vague term. EFFECTIVE demand is the people who want to buy a home and who have the ability to make the down payment needed and qualify for the mortgage needed and they have the guts and intelligence to actually do it. People who want a home but refuse to buy one until interest rates fall below 3% are not effective demand. People who whine about inability to buy a home are politician demand.
.
Giving out $25,000 checks increases effective demand. Increasing effective demand INCREASES PRICES. Only one thing decreases prices: more supply, i.e., building more houses.
.
To her credit, she also said she would get rid of red tape and other obstructions to building new homes. But it is meaningless. A. The president has virtually no jurisdiction over land use rules which I have condemned as driving up prices. That is zoning, permits, building fees. Those are all local laws, usually municipal.
B. As I have written, the basic land use problem is NIMBYs. Every time some local or state politicians try reduce barriers to building, The NIMBYs come to the next city council meeting with torches and pitchforks and lawyers. It is next to impossible to make it easier to build anything by reducing red tape, lowering fees, making permits easier to get. I was involved in a fight to prevent rent control. It was announced at a city council meeting. Local law said it had to be read at three successive city council meetings. The lawyer aired by the landlords. I wrote a newspaper ad explaining that rent control raises homeowners property taxes because tenants paying less rent reduces the values and property tax assessments of all other buildings. I did not just say that, I supplied the data. At the second city council meeting that has more angry home owners than could fit into the council room. The council tried totable the motion to be readdressed in the future. “Hell, no!” screamed the home owners. “You will KILL it right now.”
.
Berkeley, CA once was so happy with their rent control that they decided to enact home sale price controls. This is Berkeley, CA, a member of the Warsaw Pact, grade school hometown of Kamala. The liberal homeowners showed up to THAT next city council meeting. Berkeley, CA, probably the most liberal Communist place in America. I do not believe they got violent. But the house price controls were instantly killed and never heard about again.
.
That, home fans, is what keeps prices high in CA and most other places in America. Is the former San Francisco DA and the former California AG going to reduce land use rules in America? When Berkeley and Santa Monica freeze over.
.
It that true? Roughly yes.
.
The PITI to buy a home stems from the price and mortgage interest rate. She is NOT doing anything to the interest rate. They are generally set in world markets.
.
How do you reduce the home prices? Supply and demand set all prices. The only way to lower home prices is to build a lot of new homes, more than are currently being built.
.
You probably took Economics 201, actually more likely than the oft named Econ 101. It was probably an upper class level course. But let me now give you a little Econ 301.
.
Demand is a vague term. EFFECTIVE demand is the people who want to buy a home and who have the ability to make the down payment needed and qualify for the mortgage needed and they have the guts and intelligence to actually do it. People who want a home but refuse to buy one until interest rates fall below 3% are not effective demand. People who whine about inability to buy a home are politician demand.
.
Giving out $25,000 checks increases effective demand. Increasing effective demand INCREASES PRICES. Only one thing decreases prices: more supply, i.e., building more houses.
.
To her credit, she also said she would get rid of red tape and other obstructions to building new homes. But it is meaningless. A. The president has virtually no jurisdiction over land use rules which I have condemned as driving up prices. That is zoning, permits, building fees. Those are all local laws, usually municipal.
B. As I have written, the basic land use problem is NIMBYs. Every time some local or state politicians try reduce barriers to building, The NIMBYs come to the next city council meeting with torches and pitchforks and lawyers. It is next to impossible to make it easier to build anything by reducing red tape, lowering fees, making permits easier to get. I was involved in a fight to prevent rent control. It was announced at a city council meeting. Local law said it had to be read at three successive city council meetings. The lawyer aired by the landlords. I wrote a newspaper ad explaining that rent control raises homeowners property taxes because tenants paying less rent reduces the values and property tax assessments of all other buildings. I did not just say that, I supplied the data. At the second city council meeting that has more angry home owners than could fit into the council room. The council tried totable the motion to be readdressed in the future. “Hell, no!” screamed the home owners. “You will KILL it right now.”
.
Berkeley, CA once was so happy with their rent control that they decided to enact home sale price controls. This is Berkeley, CA, a member of the Warsaw Pact, grade school hometown of Kamala. The liberal homeowners showed up to THAT next city council meeting. Berkeley, CA, probably the most liberal Communist place in America. I do not believe they got violent. But the house price controls were instantly killed and never heard about again.
.
That, home fans, is what keeps prices high in CA and most other places in America. Is the former San Francisco DA and the former California AG going to reduce land use rules in America? When Berkeley and Santa Monica freeze over.
Share this post
0 comment