> That's not necessarily a bad thing. You can leverage whatever you're mortgagibg as an asset (or in this case, whatever portion of the property you now own).
"Not necessarily a bad thing" is the argument that it could have benefits under some circumstances. It's the argument that it should be allowed, not that its alternative should be prohibited.
The obvious cost is that you're paying more per month. Essentially, if you want a place to live, you're required to pay more in order to invest in real estate, even if you don't have any surplus to invest or you would rather invest in something else.
> I just think you should get ownership over some portion of the assets you are de-facto paying for.
When you rent, the landlord is covering the interest on the mortgage loan, property tax, maintenance, etc. The rent covers their costs and some profit to make it worth their trouble, which they often use to start paying off the mortgage. If there is no profit, there is no landlord to pay to build the building and either you can afford to buy it outright or you're homeless. So if you want to build capital, the money that goes to that capital is additional money on top of the rent, i.e. you'd be paying more per month because you'd be getting something you don't get when you rent. You're basically saying you think poor people should have higher expenses so the extra money can be used to force them to invest in real estate.
> Well, stalled developments are a problem across basically every metro market in the country. They don't make their money by building, they make their money by waiting for the labor market to make an eventual sale profitable.
They still make their money by building, you've just passed regulations that make building so expensive that it isn't profitable until rents are unreasonably high, e.g. by requiring them to knock down an existing multi-story building in order to add housing because most of the land is zoned exclusively for single family homes.
> you've just passed regulations that make building so expensive that it isn't profitable until rents are unreasonably high
This is just demonstrably false, though. Regulation does cause large overhead especially crossing municipal boundaries, but developers aren't building even where they've been approved to build. Either they accepted the work they knew they couldn't deliver under the current regulatory burden (essentially, committing fraud) or the bottleneck isn't regulations at all, but the other costs that dominate building.
Anyway, you can either pay off your investment or you can turn a profit. Doing both is just antisocial (ie malicious and harmful) behavior. If you're turning a profit, I better also get an equitable return. That would actually make sense.
Of course the world doesn't work like that, but nothing you're explaining helps me understand why this behavior is legal and people don't murder more landlords. This is simply not a reasonable way to divvy up resources in a community.
> developers aren't building even where they've been approved to build.
Suppose it costs $100,000 to add each additional housing unit if you could build them in areas that are currently zoned exclusively for single family homes, but they can't because the zoning doesn't allow it. By contrast, in the areas "where they've been approved to build", it would cost $800,000 for each additional unit, and the current market price is $750,000.
They're going to sit there and do nothing until the market price gets above $800,000 because otherwise they'd be losing money. If you want to change it you need to make it cost less to add housing units.
> Anyway, you can either pay off your investment or you can turn a profit.
These are not alternatives to each other. If there is any net profit, it would eventually cause the mortgage to be paid off. If there isn't any, why would anyone pay to build an apartment building?
"Not necessarily a bad thing" is the argument that it could have benefits under some circumstances. It's the argument that it should be allowed, not that its alternative should be prohibited.
The obvious cost is that you're paying more per month. Essentially, if you want a place to live, you're required to pay more in order to invest in real estate, even if you don't have any surplus to invest or you would rather invest in something else.
> I just think you should get ownership over some portion of the assets you are de-facto paying for.
When you rent, the landlord is covering the interest on the mortgage loan, property tax, maintenance, etc. The rent covers their costs and some profit to make it worth their trouble, which they often use to start paying off the mortgage. If there is no profit, there is no landlord to pay to build the building and either you can afford to buy it outright or you're homeless. So if you want to build capital, the money that goes to that capital is additional money on top of the rent, i.e. you'd be paying more per month because you'd be getting something you don't get when you rent. You're basically saying you think poor people should have higher expenses so the extra money can be used to force them to invest in real estate.
> Well, stalled developments are a problem across basically every metro market in the country. They don't make their money by building, they make their money by waiting for the labor market to make an eventual sale profitable.
They still make their money by building, you've just passed regulations that make building so expensive that it isn't profitable until rents are unreasonably high, e.g. by requiring them to knock down an existing multi-story building in order to add housing because most of the land is zoned exclusively for single family homes.