Communism and Capitilism

Investor · Provo, UT · Member since 2016 · 759 posts · 626 votes

Yesterday, I posted about how we can solve affordable housing in America.

I had over 80 responses and the conversation got very political, which was not entirely a surprise.

My question though is what economic model is better for affordable housing?

China for example is supposed to have enough apartments for the entire population and housing is becoming more and more affordable while that bubble bursts.

In America, we own our real estate and have turned housing into an asset we invest in and make money on rents as well. I am not saying China doesn't as well but my point is that we have a major housing shortage and we don't have a free market that says build build build until supply and demand converge.

So when it comes to housing which approach is best?

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Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes

Quote from @Logan M.:

Yesterday, I posted about how we can solve affordable housing in America.

I had over 80 responses and the conversation got very political, which was not entirely a surprise.

My question though is what economic model is better for affordable housing?

China for example is supposed to have enough apartments for the entire population and housing is becoming more and more affordable while that bubble bursts.

So when it comes to housing which approach is best?

Affordable housing doesn't adequately describe what you want. I was in Moscow just after the fall of communism. Everybody that wanted a place to stay had one. The buildings were crumbling, elevators didn't work so we had to climb the stairs and the one I stayed in was for the elite scientists and engineers who were treated better than the average folks. The balconies were about to fall off the side of the building.

The joke was, "we pretend to work and they pretend to pay us". Housing was free so it didn't eat in the couple of hundreds dollars a month they were paid.

The nuclear physicist who guided us through the Kremlin said he made more money giving tours than being a rocket scientist. But, everybody has affordable housing.

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Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
2y
Quote from @Logan M.:

Yesterday, I posted about how we can solve affordable housing in America.
I had over 80 responses and the conversation got very political, which was not entirely a surprise.
My question though is what economic model is better for affordable housing?
China for example is supposed to have enough apartments for the entire population and housing is becoming more and more affordable while that bubble bursts.
In America, we own our real estate and have turned housing into an asset we invest in and make money on rents as well. I am not saying China doesn't as well but my point is that we have a major housing shortage and we don't have a free market that says build build build until supply and demand converge.
So when it comes to housing which approach is best?

Affordable housing doesn't adequately describe what you want. I was in Moscow just after the fall of communism. Everybody that wanted a place to stay had one. The buildings were crumbling, elevators didn't work so we had to climb the stairs and the one I stayed in was for the elite scientists and engineers who were treated better than the average folks. The balconies were about to fall off the side of the building.

The joke was, "we pretend to work and they pretend to pay us". Housing was free so it didn't eat in the couple of hundreds dollars a month they were paid.

The nuclear physicist who guided us through the Kremlin said he made more money giving tours than being a rocket scientist. But, everybody has affordable housing.

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Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
2y
Quote from @Account Closed:

Quote from @Logan M.:

Yesterday, I posted about how we can solve affordable housing in America.
I had over 80 responses and the conversation got very political, which was not entirely a surprise.
My question though is what economic model is better for affordable housing?
China for example is supposed to have enough apartments for the entire population and housing is becoming more and more affordable while that bubble bursts.
In America, we own our real estate and have turned housing into an asset we invest in and make money on rents as well. I am not saying China doesn't as well but my point is that we have a major housing shortage and we don't have a free market that says build build build until supply and demand converge.
So when it comes to housing which approach is best?

Affordable housing doesn't adequately describe what you want. I was in Moscow just after the fall of communism. Everybody that wanted a place to stay had one. The buildings were crumbling, elevators didn't work so we had to climb the stairs and the one I stayed in was for the elite scientists and engineers who were treated better than the average folks. The balconies were about to fall off the side of the building.

The joke was, "we pretend to work and they pretend to pay us". Housing was free so it didn't eat in the couple of hundreds dollars a month they were paid.

The nuclear physicist who guided us through the Kremlin said he made more money giving tours than being a rocket scientist. But, everybody has affordable housing.

China is destroying a lot of buildings that were just never finished and acually didn't have plumbing for toilets. It's a big scandal of a very corrupt system.

But, but, but it was affordable housing. Well, no plumbing and the bankruptcy of the two largest builders in China doesn't make for "safe" housing.
Evergrande’s bankruptcy may be just the beginning of China’s real estate crisis , Fri August 18, 2023
https://www.cnn.com/2023/08/18/investing/china-evergrande-ba...

But I though China was invincible? And had lots of affordable housing?

"It’s hard to overstate the importance of the property market China. The industry accounts for as much as 30% of the country’s economic activity, and more than two-thirds of household wealth is tied up in real estate."

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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
2y
@Logan M.
There is plenty affordable housing in this country. The issue is people want convenient housing not affordable housing.
People want to be in the perfect location with all the amenities, but want it to be affordable. That doesn’t happen. Live an hour from a major city, and most instances you can easily find an affordable place to live, especially if you’re willing to have roommates.
With an increase in remote work, there are still many opportunities to work remotely and live also in very affordable desirable locations.
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Jeremy Horton
Rental Property Investor · Somewhere over the Rainbow · Member since 2021 · 1k+ posts · 1k+ votes
2y
Well a major problem here in the US is the sense of entitlement...entitled to own a affordable house where you want it to be, entitled to be paid a "living wage", entitled to have college debt cancelled, entitled to free food, entitled to free health care - the list goes on
The free-market is the best system the world has ever seen. The question really is how much to regulate it.
Have you ever seen "affordable housing"? They look like sh*t. Crime and drug infested in a couple years. Maintenance is horrible.
If you haven't noticed, practically anything the government runs goes to complete sh*t very quickly. And it sounds like you're advocating more government involvement?
Personally I don't have a problem with providing "free" housing - under one condition - you lose the right to vote. You take government handouts (aka tax dollars from people who support the country) then you lose the right to vote.
So to answer your question - I think LESS government intervention would allow the housing "crisis" to solve itself. I mean the crisis itself was manufactured by the government in the first place...
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Henry ClarkPro Member
Developer · Member since 2020 · 4k+ posts · 4k+ votes
2y
Actually you never engaged on your own post.
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Henry ClarkPro Member
Developer · Member since 2020 · 4k+ posts · 4k+ votes
2y
Which is better?
China. You pay for the building even before it is built. A large majority of the farm kids have already moved to town. 1 child policy guarantees less demand for housing. Add increase in education, families have less babies. Demand for housing decreases. They have overbuilt beyond demand.
US- housing inventory based on supply and demand. Yes ups and downs not market driven.
OP you never did define affordable housing.
China even though they have to many houses they are not affordable.
The US has plenty of housing. Like I said before you need to dissect the issue.
2 Reply
Alan F.
Flipper/Rehabber · CA · Member since 2023 · 1k+ posts · 1k+ votes
2y
why do I have a feeling this thread is going to be a train wreck?
FWIW I'm team Cap.
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Matthew Irish-JonesBusiness Member
Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
2y
@Logan M. The free market is not the problem. The restrictions by government on the free market are the problem.
The two cities with some of the highest rent per saw ft are San Francisco and NYC. They also have the most restrictive building codes, rent control, horrible eviction courts, etc.
Home building has become so expensive and restrictive, and delinquency risk so high, builders build higher end units to avoid delinquency risk. Affordable housing has to be subsidized with tax credits.
The same has happened in low income areas due to Covid and prolonged evictions where I live. If Investors can only hold one month or a security deposit, evictions take 5 months, and the consequences for non payment are almost nothing, investors stop buying.
If payment is prompt, evictions are fast, and investors are allowed to take larger security deposits, they will investor more in low income areas.
The Market has NOT failed in this situation, it has not been allowed to work.
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Henry ClarkPro Member
Developer · Member since 2020 · 4k+ posts · 4k+ votes
2y
@Matthew Irish-Jones

Could only vote once. If 9 of you reading who don’t normally vote would vote for this. Thanks.
@Logan M.. This is reverse psychology. What are your cities regs in eviction, collections, etc for housing?
1 Reply
Steve K.
Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes
2y
Awesome, now that your other post was so useful in solving the affordable housing issue, you've decided to take it one step further and go ahead and solve the century-old capitalism vs. communism issue. We're just solving all the worlds problems on here!
6 Reply
Alan F.
Flipper/Rehabber · CA · Member since 2023 · 1k+ posts · 1k+ votes
2y
Quote from @Steve K.:

Awesome, now that your other post was so useful in solving the affordable housing issue, you've decided to take it one step further and go ahead and solve the century-old capitalism vs. communism issue. We're just solving all the worlds problems on here!

Lol, goals!
2 Reply
Alex Kreeger
Member since 2019 · 63 posts · 60 votes
2y
Quote from @Logan M.:

Yesterday, I posted about how we can solve affordable housing in America.
I had over 80 responses and the conversation got very political, which was not entirely a surprise.
My question though is what economic model is better for affordable housing?
China for example is supposed to have enough apartments for the entire population and housing is becoming more and more affordable while that bubble bursts.
In America, we own our real estate and have turned housing into an asset we invest in and make money on rents as well. I am not saying China doesn't as well but my point is that we have a major housing shortage and we don't have a free market that says build build build until supply and demand converge.
So when it comes to housing which approach is best?

“My last post got political, so let me create another one” lol
3 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @Jeremy Horton:

Well a major problem here in the US is the sense of entitlement...entitled to own a affordable house where you want it to be, entitled to be paid a "living wage", entitled to have college debt cancelled, entitled to free food, entitled to free health care - the list goes on
The free-market is the best system the world has ever seen. The question really is how much to regulate it.

I really like how you describe it. It is ENTITLEMENT issue.

Go live in Class C/D neighborhood with diversified people and everything is affordable LOL
0 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
2y
Quote from @Logan M.:

Yesterday, I posted about how we can solve affordable housing in America.
I had over 80 responses and the conversation got very political, which was not entirely a surprise.
My question though is what economic model is better for affordable housing?
China for example is supposed to have enough apartments for the entire population and housing is becoming more and more affordable while that bubble bursts.
In America, we own our real estate and have turned housing into an asset we invest in and make money on rents as well. I am not saying China doesn't as well but my point is that we have a major housing shortage and we don't have a free market that says build build build until supply and demand converge.
So when it comes to housing which approach is best?

This China thing is extremely complicated to be digested, nobody owned house in China as they're all leasehold and not Fee Simple, you guys can correct me if I'm wrong.
But saying China way is communism is very wrong too, it's modified hybrid version of experimental capitalism in socialism view it's more relevant that way rather than black and white commie or capitalist.
Also one need to go to Shanghai to check their progress.
But I want to emphasize is that China is not only building houses for the Chinese but they built house,infrastructure and industrial complexes from Africa, Asia to Middle East. Way to do this is by having hundred years loan and their project is technically executed with Chinese own labour force as well.

It's too early to say whether their model works better or not but I could say American influence is heavily decaying those days outside US and their allies because of this.

The rest of the world (except europe) actually can live without US ; but they can't live without China at least for now.
0 Reply
David Dachtera
Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
2y
An important point to remember about U.S. housing is the Crash of '07 / '08. At the time, economists pointed out that some 80% of builders and developers went under resulting in new construction coming to a virtual stand-still. This housing shortage was predicted back then as a result of this temporary slowing or stoppage of new construction.
Even with few or no new homes being built, people continued to graduate college, get married and start families. The refugee and immigrant issues made that even worse.
My $0.02 ...
2 Reply
Alan F.
Flipper/Rehabber · CA · Member since 2023 · 1k+ posts · 1k+ votes
2y
Quote from @David Dachtera:

An important point to remember about U.S. housing is the Crash of '07 / '08. At the time, economists pointed out that some 80% of builders and developers went under resulting in new construction coming to a virtual stand-still. This housing shortage was predicted back then as a result of this temporary slowing or stoppage of new construction.
Even with few or no new homes being built, people continued to graduate college, get married and start families. The refugee and immigrant issues made that even worse.
My $0.02 ...

Very good point, a topic not discussed much. It was really bad for the trades, life changing for many.
0 Reply
Tony AcreeBusiness Member
Real Estate Agent · Oakland County, MI · Member since 2022 · 18 posts · 19 votes
2y
This is not complicated: Communism has never worked. Ever!
And to be honest, I'm shocked that the question is even asked on a website that is only possible to have in a capitalist economy.

I was going to detail the mess that China is in right now with their real estate market, but @Account Closed already did a great job.
[email protected]248-872-2068
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Logan M.
OP
Investor · Provo, UT · Member since 2016 · 759 posts · 626 votes
2y
@Tony Acree I probably should have phrased it as Capitalism and Freemarket vs. Government intervention and socialist policies.
We don't live in a society with a Free Market so pretending like we do doesn't help.
2 Reply
Account Closed
Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes
2y
Quote from @Tony Acree:

This is not complicated: Communism has never worked. Ever!
And to be honest, I'm shocked that the question is even asked on a website that is only possible to have in a capitalist economy.

I was going to detail the mess that China is in right now with their real estate market, but @Account Closed already did a great job.

Yeah, and it's deadly
1 Reply
Tony AcreeBusiness Member
Real Estate Agent · Oakland County, MI · Member since 2022 · 18 posts · 19 votes
2y
Quote from @Logan M.:

@Tony Acree I probably should have phrased it as Capitalism and Freemarket vs. Government intervention and socialist policies.
We don't live in a society with a Free Market so pretending like we do doesn't help.
I agree. We no longer live in a truly capitalist economy, and that is the problem. It's the government intervention that is causing the issues we see today. As far as I can tell, the path back to a healthy, affordable market is to reduce government interference.
[email protected]248-872-2068
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