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Undoubtedly, the cost of housing has been rising relative to incomes, especially for young and poor workers. There was a slight reprieve when the housing bubble collapsed, yet the unaffordability continued to climb quickly thereafter.
Given that people are now regularly spending 30-50%+ of their incomes on housing, what are we going to do about it? Clearly this isn't good for quality of life. How do we expect people who are spending this much just to live to pay down debts and save for retirement? What are your ideas on how to solve this problem?
Personally I'd like to see mortgage rates rise to temper demand for mortgage debt. While not perfect, there does seem to be a correlation between the ratio of mortgage debt/GDP and home prices/income.
I'd also like to see unearned income at least taxed at the same amount as wages, as this would decrease speculation in housing and drive down rents. Some may counter that this will decrease investment in new housing units. That may be, but this would also decrease the cost of land itself which would counteract that and also incite more people to buy land and build their own homes on it.
What are your thoughts? Criticisms of my ideas and ideas of your own are welcome!
Given that people are now regularly spending 30-50%+ of their incomes on housing, what are we going to do about it? Clearly this isn't good for quality of life. How do we expect people who are spending this much just to live to pay down debts and save for retirement? What are your ideas on how to solve this problem?
Personally I'd like to see mortgage rates rise to temper demand for mortgage debt. While not perfect, there does seem to be a correlation between the ratio of mortgage debt/GDP and home prices/income.
I'd also like to see unearned income at least taxed at the same amount as wages, as this would decrease speculation in housing and drive down rents. Some may counter that this will decrease investment in new housing units. That may be, but this would also decrease the cost of land itself which would counteract that and also incite more people to buy land and build their own homes on it.
What are your thoughts? Criticisms of my ideas and ideas of your own are welcome!