Isn't it better for society if retirees downsize to a retirement community and allow young families to move in to the neighborhood with schools and amenities?
Isn't it better for society if retirees downsize to a retirement community and allow young families to move in to the neighborhood with schools and amenities?
While that may be useful, there should never be a necessity to move out of a house you’ve paid off, and quite well may have built up to support your own aging in place. Some people want a “forever home”, and that’s okay.
In some countries and cultures the good of the many comes before the good of the individual, no matter the sacrifices required to get there. The US (and to a slightly lesser degree, Canada) generally does not subscribe to such a cultural mantra.
Edit to add: for the cases where the societal good really does outweigh the personal good, we have a tool for that: eminent domain, which is how we build train lines and so forth.
>While that may be useful, there should never be a necessity to move out of a house you’ve paid off
This line of logic doesn't follow. There's plenty of old people who need to move out for non-financial reasons (e.g. can't live independently anymore), and it doesn't really make sense to me that having to move out because you can't afford your mortgage is okay while not being able to afford your taxes isn't. In any case, we can have our cake and eat it too by building more housing. Homes become affordable for young people if supply increases and the tax base broadens enough that taxes go down for established homeowners.
At least in the US, mortgages are typically fixed cost (I know this is not the case in many other countries, like the UK). You know when you sign the contract what your monthly cost will be, for the life of the loan. ARM loans are an exception to this, but ARM loans are nearly universally considered a terrible idea unless interest rates are egregiously high at signing time, or some other edge case applies to you.
Thus, you can budget around the mortgage payment in a predictable way, and if you have to move out because you can no longer afford it, that's a very different thing than if your property taxes magically change because a theoretical buyer may theoretically be willing to pay some astronomically higher cost for your house than you paid for it.
So, respectfully, I disagree with the framing that we have to take both or neither. They are separate budgeting concerns, and separate policy concerns.
A point against: if someone was an early adopter in a community that urbanized over 30 years, in effect the increased value means their future ownership at present rates requires the collective subsidy of their neighbors. Young families subsidizing the elderly in this way is a huge issue in tax burden disparity where I live.
How so? e.g. anywhere I've looked, schools are a huge part of the budget. Special education alone is over 10% of the county budget where I live. Schools in total are over half of city+county. The elderly wouldn't be contributing to service demand there. They're likely also not going on tons of crime sprees necessitating police, generally another large budget item.
Like another poster said, things like pensions and medicare might overall drain the entire economy, so the end result is the same, but that seems more diffuse than local tax bases, and wouldn't properly appear in local government budgets.
If we're going for a "better for society" angle, I have so many other things that are far more impactful for society and less damaging to the individuals that we will never get around to messing with evicting pensioners so younger families can use their spot to get to school.
People make the best decisions for them and they have the freedom to do so. Who am I to decide that their 2 bedroom bungalo needs to be torn-down for a massive 5 bedroom infill for example.
Given the enrollment collapse we're not running out of space in our schools LOL such that we have to kick seniors out of their houses to make space.
They're also economically and socially viable participants in the community.