76 Secrets – U.S. Home Ownership – 3 Solutions
The U.S. real estate industry’s viewpoint is seen everywhere.
Naturally, it makes a lot of economic sense for this industry with a zillion real estate agents, loan officers, developers, builders, suppliers, and so on, to spend a lot of time and money promoting narratives that are good for their business. That includes talking up government programs and policies that are good for their business, although they always sell them as being good for U.S. home ownership and the American Dream.
The views of the huge U.S. real estate industry dominate the discussion of U.S. homes.
Here are 76 U.S. real estate secrets you’ve probably never seen before because, naturally, they don't fit the real estate industry narrative and aren't good for their business, and 3 partial solutions to increase U.S. home ownership, wealth, and economic growth.
But First, 3 (Partial) Solutions Summarized
If we want to, we can easily increase the long-term U.S. home ownership rate AND our free-and-clear home ownership rate.
That would increase wealth for current and future generations, as well as permanently increasing U.S. economic growth. The choice is ours.
#1 - Taxes
The easiest and quickest way to significantly increase U.S. home ownership is to change our tax code on rentals of single-family homes and condos. We can stabilize home prices (make booms and busts smaller) and permanently increase the percentage of Americans who own homes (increase their wealth).
The real estate industry HATES this and doesn't talk about it but it's a completely obvious and a completely free solution – eliminate all landlord-only tax breaks on single-family homes and condos, and have only One Tax Code for Homes. Everyone gets tax breaks on their one primary residence but zero tax breaks on any other homes. Then watch U.S. home ownership increase at no cost. Even states can do it. A tax code that is good enough for live-in owners is good enough for landlord owners.
The real estate industry blames everything on supply, supply, supply but the unnecessarily high demand caused by landlord tax breaks are also a big problem. It's much easier and quicker, however, to reduce government-created investor demand than it is to increase the total supply of housing. Just remove all government tax incentives for landlords to buy and own single-family homes and condos.
The Transition is the Hard Part. In the future we could apply the One Tax Code for Homes policy to homes when they’re turned into rentals and when current rentals are sold. Current owners of current single-family and condo rentals could be grandfathered in to keep their current tax breaks for a decade or two during the transition period.
The ultimate goal is to get rid of ALL government incentives (taxes, laws, policies, etc.) to own single-family homes and condos that aren’t incentives for citizens to own those homes and to live in them as their primary residences.
#2 - Mortgages
This is FAR, FAR more complex but we can also redesign U.S. mortgages and redesign the largely nationalized U.S. mortgage industry to maximize the home ownership rate and the free-and-clear home ownership rate over the long run, instead of maximizing home sales over the short run and mortgage debt over the long run.
Redesign U.S. mortgages to protect the wealth of all home owners over the long run, not just the wealth of banks, mortgage lenders, and the financial industry.
#3 - Homes
In addition, we can greatly expand non-profit, limited-profit, cooperative, community land trusts, public housing developers, government-owned and other social housing supply, which would help both renters and home buyers, as well as stabilize house prices, rents and the economy, in general.
Social housing is FAR, FAR slower and more expensive in the beginning but in the long run may be the best solution for more affordable homes and rents, and a stronger, more stable, U.S. economic growth.
Economically, it would be easy to increase U.S. home ownership. Politically, it wouldn't be easy but if enough politicians decided they wanted to increase U.S. home ownership, they have options, and they could increase home ownership significantly and permanently. The cleanest option is to remove all landlord-only tax breaks on all single-family houses and condos that are bought in the future.
In the meantime, expect the real estate industry to continue to tell everyone the only solution to every housing problem is either less government interference, or more government incentives (taxes, laws, policies, etc.), or both, whichever is most profitable for the for-profit real estate industry at the time.
Stay tuned for the 76 Secrets.