this post was submitted on 20 Sep 2023
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Primary residence homeowners are investors, usually. Most commonly as a capital asset used to facility profitability in the labour market. It is a false narrative to frame them differently as if they are somehow special. I get why we want to frame them differently, but it is incorrect to do so. An investor is an investor is an investor.
I offer no opinion on whether or not investing in housing is positive or negative. It has no relevance and to share opinion is bad faith participation.
Okay, I think I see where you're coming from. You seem to think that any purchase of a capital asset for personal gain is an investment. That's tough to argue against, but, in that case, I would argue against your contention that "an investor is an investor is an investor." Not all investors have the same motives or the same impact on the market.
My grandparents, my parents, and I invested in our "homes", not in "housing". The plan was never about increasing value over time, but in being able to continue our lives with stable and affordable housing post retirement. Having nothing more than property taxes to worry about had a big impact on our ability to retire with "normal" jobs. We mostly ignored changes in prices, because we mostly didn't care, because our motives were not profit, but long term stability of lifestyle. We got our homes paid off around the time our kids needed help with postsecondary education. We got that out of the way in time to make any major renovations or purchases in advance of retirement. And we got those out of the way in time for our retirement.
This is different from those who acquire housing for rentals or "flipping". And neither are those people anything like those who invest in purely financial instruments that have housing and land at the foundation. What they mostly have in common is that they want, no need, to have the property continually increase in price, ideally faster than inflation.
That is a marked contrast with those who are "investing" in the place they live in and hope to continue living in through retirement. In that case, it doesn't matter how or even if prices change, because it will have little or no impact on their ability to continue with stable housing.
But you have/had a job, which suggests that the house was really purchased as a capital asset in which to use to profit. That you can still derive benefit from it later in life is just a nice side benefit. I suspect you're not moving to a location where there is no job market to free up the productive asset for younger people when you retire?
How so? Rentals offer the same capital asset to workers who are not looking to own. There are a lot of good reasons why someone might want to rent the capital over owning, even if only for short periods of time. "Flippers" keep liquidity in the market to ensure that the asset class is always available for purchase when one is ready to become an owner. It's all rooted in a worker's desire to use housing as capital to turn a profit. It's all the same investment at the end of the day.
Umm, no. Shelter is a requirement, whether employed or not. Given that I have never changed where I live in order to take a job, my choices regarding shelter have always been independent of my choice of income generating activity. Just the opposite, in fact, given that I've had to change my shelter based on loss of income, but have never had to change my shelter when income increased.
No that is just one of the actual reasons for making the housing choices I've made. I have never had a house so that I could work, but have always had to work in order to stay sheltered.
Another reason for my housing choices is related to hobbies. It's hard to do hobby manufacturing or host band rehearsals in a condo.
Why would that be necessary or desirable either individually or societally? I didn't choose my home for it's proximity to work. I didn't move when I changed jobs or when my employer moved to a different location. I developed my garden and built a shop for recreation and don't see how anyone will be served by pulling up stakes and moving somewhere else, especially given that my choice of housing had nothing to do with proximity to employment, but proximity to outdoor recreational activities.
Rentals would sort of work. One important thing I learned during the period of time we rented was that it left too many important decisions in the hands of people whose interests did not align with ours.
Shelter may be, but shelter and housing are not synonymous.
So if we moved you to Wager Bay, Nunavut, nothing about your profitability prospects would change?
Hobbies are the product of having turned a profit. If the home cannot provide you profit, hobbies are out of the question.
If you are not making productive use of an asset, you see no value in passing it along to someone who can?
Most of your counterarguments have merit, but I take some exception to your apparent concept of productive use of an asset.
I have put substantial thought, years of planning, labour, and, yes, the profit obtained from my employment into the creation of this asset specifically to enable my chosen way of living and passing time. To say that this is not a productive use of an asset borders on insulting and has no more merit than the claim that a tree has no value until it's been converted to lumber.