> Houses are not the same thing as cash or other fungible assets.
> Especially not when you're getting older
Houses are wealth. And the wealth in them can be accessed while retaining use of the house. Especially when you are getting older.
Why are we replaying the dishonest “think of the retirees” now? It was bullshit in California in 1978 to sell Prop 13, and its even bigger (and more transparent) bullshit now when, especially when it is used to sell the same basic idea.
How can someone be so out of touch? A person buys a house, spend a whole life there, and through no action of her own happens to live in an area that drastically appreciates in value over the decades, all she wants is to spend her last few years in the same house that she loves and would never consider selling, and now we ask them to kindly pay all their income or more in property taxes, otherwise fuck off??
And where would she move to? All decent areas probably also increased in price, her property went up 10x in value but so did all other properties she would contemplate to buy. That’s the fallacy of thinking property is wealth when talking about your only residence.
What a morally bankrupt viewpoint.
The suggestion is that this person can get a mortgage to pay their property taxes over the next 20 or 30 years as part of their retirement - or they can sell their property and live well in a cheaper location.
Claiming that the retiree has a right to both the home value and the ability to live there is the friction point. It reads as hollow in the face of rising homelessness and the inability for young people and families to access housing.
All else equal, I can see why the ability to live in the same house until you die would be given a high moral value. But in practice, IMO, this culture causes a number of problems. For instance, where I live, there was a lot of growth in the 70s and 80s, and a lot of young families, so they built a bunch of schools. It's an attractive place to live, so a lot of those people who lived in those houses when they were new and raised those families and attended those schools have kept living in those houses. But those kids that they raised there can't live in those same neighborhoods as adults, because there's no turnover, so they can't raise their own kids there. So now the schools are all half (or less) full, because the neighborhoods they were built to serve no longer have a lot of families living in them. So then they have to close and consolidate schools and everybody hates that. I don't really have a strong view on the moral question of whether houses "should" be owned by older people who have lived there a long time or by young people families, but from a pragmatic standpoint, this situation seems quite bad to me.
I think if we had a totally different culture, with multigenerational families living in the same house, then this might work better. But this model where we build new family friendly neighborhoods with parks and schools, and then nearly everyone ages in place and all the family amenities become empty over time, and the families all end up in the next new neighborhood and then it repeats, this doesn't seem ideal to me.
Schools aren't forever. They're just buildings that get built, expanded, replaced, upgraded, mothballed, abandoned, sold and/or destroyed all the time as the needs of the community using them changes. Some may last for decades, and some for centuries. Some have already lasted far too long.
It's OK that they don't last forever; they're schools, not irreplaceable shrines.
And speaking of things that also don't last forever: Homeowners. Grandma Sally isn't going to live forever. The house winds up on the open market in order to seek satisfaction of Grandma's debts, and then some new family buys it at market price and is free to breed a whole new fleet of kids to raise there.
There's still eventually churn in the marketplace, and in the neighborhood. The churn didn't disappear just because Grandma Sally was able to choose to keep living in the same place until she died quietly of an agonizingly painful heart attack as she stood in the kitchen making tomato sauce after church on a Sunday morning before the family dinner that afternoon.
People die all the time. It's often tragic, but it's natural and ultimately unavoidable.
People also get forced out their forever-homes all the time, too. That's also often tragic, but it happens for artificial reasons that could be avoided if we bothered with trying to do so.
> Schools aren't forever… Some may last for decades, and some for centuries. Some have already lasted far too long.
That seems a bit ironic?
> Grandma Sally isn't going to live forever. The house winds up on the open market in order to seek satisfaction of Grandma's debts
Not always, grandma can pass the home down to whoever. IIRC there are ways to do it without triggering a reevaluation on the original purchase price.
Ironic? Is it ferrous or something?
Anyway, Grandma is as dead as that Sunday dinner. She won't care that the new occupants are being complete heathens about smoking dope and makin' babies on the sofa.
Schools closing are a symptom of a community that has not retained a healthy mix of people at different stages of life.
The comment you are responding to is saying the opposite. They are saying that the person can access the wealth of the house (eg via a reverse mortgage) in order to pay the taxes while staying in the house. That's what this meant:
> Houses are wealth. And the wealth in them can be accessed while retaining use of the house. Especially when you are getting older.
Simple example. I bought the house at $100k. It's now worth $500k. That means I owe $20k/yr in taxes, but it also means I have $400k of additional wealth. A bank will lend me money with that wealth as collateral. If you imagine that the interest on the loan is roughly equivalent to the rate of appreciation of the property going forward, that's 20 years of taxes paid for by the increase in home value. Seems like a pretty good deal for everyone!
GP is not forcing the retiree to move. GP is instead advocating retaining the use of property while reducing the cash flow burden. Asking someone to get a cash out refinance is not morally bankrupt; it is a pragmatic and fair solution. Some states also have deferred property tax schemes; these are even better. It is only fair for someone who, by luck, paid $100k to get a house that is now worth $500k and lives in a neighborhood that is now far better than when she bought the house.
Defered property tax for elderly can be (and usually is) implemented as a lien on the estate, to be settled upon the owners death. Do you heve any problem with that? Or should we now also think of (inheritance of) the children?
Yeah, _seriously_.
"And where would she move to?" -- Either the graveyard or the incinerator? She's dead... the bill doesn't come due until after her death and is settled from the value of the house.
It's classic neoliberalism think which for some reason the tech crowd is unreasonably susceptible to. "Oh you're poor? Can't afford your bills? Must be your fault." It's utterly disgusting.
Everyone needs a place to live, not only boomers. There's a generational injustice at play in the idea that you get for $10 what I must pay $100.
You're not wrong, but that's an entirely different discussion from whether or not someone should be forced out of their house simply because gentrification and inflation causes their taxes to go up year after year likely long after they're done working. Oftentimes people buy homes in low-cost areas because that's what they can afford. It's not their fault when the area gentrifies and their taxes skyrocket past their means through no fault of their own. We can advocate both for homes to be more affordable for people that need one and for people to not lose their homes due to constantly rising taxes.
It’s not a bullshit idea, it is realistic and the problem in California is that it includes commercial and second homes.
I don’t want my country to force old people to either move from their home, or take out risky debt.
There are absolutely problems and prop 13 has been awful for California but it’s a red herring to worry about the primary residence exceptions.