General Discussion
In reply to the discussion: America without Landlords: A more in-depth discussion. [View all]whatthehey
(3,660 posts)In the vast majority of the country, excepting constrained megalopolitan areas like NYC and the Bay Area, it is cheaper to buy than rent.
People who rent do so then because
a) they have bought into the bumff that this is less restrictive and more mobile (I've lived in 8 states with owned houses, and have never had a problem relocating efficiently. Certainly far less than a 12 mo lease would have caused), so renters by choice definitively willing to pay above mortgage prices (again with a few exceptions) for their perceived freedom and in some cases the laughable fantasy that they are not paying for maintenance repair or property taxes, which of course they are, just as part of monthly rent rather than in unpredictable chunks.
b) They are unable to secure a bank loan to get a mortgage. Renters by need. While there are always a few who if the median house price were 150k instead of 250k might qualify, most would still be left out of the market because banks don't want to be stiffed out of 150k any more than 250k, and people who cannot get loans are in that position almost universally because non-payment is a demonstrated probability.
So a wants to rent and b cannot get a mortgage and are unlikely to have enough cash to buy even at bargain basement prices. What are they supposed to do? Exactly how low do you imagine houses would drop? Unless it's within the cash range of the working class with poor credit, which is absurd on material costs alone, where do the b group live? What about the desire of the a group not to own?
Furthermore your property tax concept is laughable. Millions of people, me included, in fact likely the majority of all non starter-house buyers, buy a house on what they need/want not what they can just stretch to afford. My house cost, and is still worth, less than my annual income (I'm not spectacularly rich either, just live in a low cost area). I could easily buy four times the house. I don't want to. If I move to that 9th state and your plan is magically in place, I'll just buy the equivalent house at, say, half the price and pay half the property taxes. Good luck funding local schools and roads and services when the majority of home buyers do the same.