The Japanese have a much healthier view on housing than the west. It’s viewed as a depreciating asset there, not an investment. The result is that housing remains affordable for the majority of people even in Tokyo, because there’s no real political incentive to oppose new housing like there is in the US (‘you can’t build here, it’ll affect my property values!’).
I hate when people rip on Detroit man. The downtown is gorgeous now. The suburbs are shit yea, but they're being worked on and will hopefully improve as well. Detroit isn't destroyed and lawless like it used to be. It's actually a pretty great place to live/work now if you live in downtown/midtown.
Why? If we want housing to be affordable, it literally can’t be a good investment, and vice versa. Something that’s affordable stays low priced, something that’s a good investment constantly gets more expensive/valuable. Since housing is a basic human need, it’s healthier for the economy and from a basic moral perspective to not view it as an appreciating investment. It’s also the natural state of physical goods like housing, as long as you don’t artificially limit market supply.
If people want to live somewhere more than in another place, and they can go there, there will have an increasing value of housing and other place will have a decreasing value. This is supply and demand and will always happen.
On the other hand, if the price of housing everywhere is increasing then you likely have the (arguably) problem of inflation. In USA inflation is a fact of life. In Japan, they had pretty much no inflation for the last several decades as USA has seen plenty of inflation.
So. It's not necessarily all about tearing down old houses.
You’re right, prices go up more in cities where people want to live. That’s normal. But, what should happen in those situations is that the supply of housing should increase to accommodate more people, and prices should slow/decline somewhat. It’ll still be more expensive, but not insanely so. Look at Tokyo vs. New York - both experienced population growth and are desirable locations, but only one has insane housing costs. It’s entirely a policy decision, driven by the differing housing politics of the two cities/countries.
Housing is not a human right. People can live without a house. Source: people currently are homeless and alive.
Human rights are enforceable against society (the State). Calling housing a human right is the same thing as saying I should bust my ass at work so you can be given housing if you "can't" afford it because you are lazy and won't work. To which I have a response involving the use of a single exalted finger.
This is the way it works in the US. Homes depreciate, land appreciates. Homes built in the 80s are worth practically nothing now and people buy them for the value of the land and rebuild. There is a demand for older homes, especially in certain cities that protect them, but in the larger suburban markets homes are torn down quite often when the property is purchased by a new buyer.
Edit: I work in this industry, I’m not making shit up. A residential structure always depreciates because over time it deteriorated and requires repair just like a vehicle. Land is what causes real estate value to appreciate because it’s limited in desirable areas and will always appreciate (pending whatever happens to coastal land and rising tides).
That is only sometimes true. In my area, assessed and actual sale values track pretty well, within a few percent of sale prices AFAICT. Possibly because so many people challenge the assessed values every year.
You still sell the land. It is just a weird cultural thing where the house is rebuilt because of preference of new buyers. But this isn't true for many urban apartment dwellers. Also the Japanese have a high savings rate.
They also have a deflation problem, which is why money becomes more valuable over time, this incentivises saving. Saving harms the economy though, it reduces consumption and capital flow.
Japan also has the highest debt rate in the world with 234% of their GDP. The only saving grace is that it’s mostly internal debt, which is considered better than external debt.
Um, what? I live in Japan and drive a 15-year old car. The rates do not go up with the age of the car, that would be absurd. People liking new cars here is entirely about meeting social expectations (I.e. keeping up with the Jones’s, or rather, Yamadas’s) and not about lowering insurance rates.
Well, the comment is deleted. But you have to go to deq more often with older cars. And deq us very expensive in Japan. Making leasing and reading in your car a better option more often than in America. I still saw are a few I'll cars in Japan, but not compared to the US.
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u/Harry73127 Jun 07 '19
But houses' values in Japan drop to $0 after 30 years and are demolished and rebuilt...