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subzero112001 t1_itbf82x wrote

Reply to comment by Parkimedes in Many countries have a "hidden welfare state" for incumbent homeowners, as governments subsidize homeowners through the tax system. The homeownership welfare state is strongest in the US and other Anglophone countries, but weakest in the Scandinavian countries. by smurfyjenkins

Could you explain how poor people are paying more for housing compared to someone who buys a house?

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antfucker99 t1_itbhg7o wrote

When a person buys a house, and pays money into that loan, they are essentially paying themselves, as they accrue net value on an asset they can sell later. When a person rents a house, that money is just gone. There is no value return, you have essentially just bought the opportunity to live in a house for a period of time. Therefore, over time, the person that owns the house will have more assets than the person renting, even if they make the same.

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Manofalltrade t1_itcn9aw wrote

Renters are paying all the expenses for the property they live on, including the cost of maintenance that they could possibly be doing themselves, PLUS a nice amount of profit for the person that they rent from. Rent prices also don’t scale well in the lower range, so people are paying more for less.

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thejoeymonster t1_itn9bsf wrote

Aside from the loss of paying rent, we also lose in higher interest and insurance rates over those who can make larger down payments or buy outright and then rent back to us for the mortgage plus cost plus expenses and most importantly profit.

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subzero112001 t1_ito5seg wrote

> buy outright and then rent back to us for the mortgage plus cost plus expenses and most importantly profit.

Saying that you pay more because someone else makes a business out of it is like saying that walmart makes more money cause it buys stuff in bulk then sells it to you at an increased price. Thats not really an argument but more like a method of making money.

>Aside from the loss of paying rent

But when you pay rent, you don't have to pay for repairs and maintenance. Heck, sometimes the utilities are included into that rent. Much cheaper than spending $20,000 on a new roof. Or paying $9,000 in taxes per year.

>we also lose in higher interest and insurance rates over those who can make larger down payment

The interest rates are based upon a system which is doing a person a favor. By loaning them money. It's not "Poor people pay more for a house", its more like "The more money you borrow, the more interest you'll have to pay". It doesn't matter whether they're poor or rich, the more money they borrow the more interest and higher rates they'll have to deal with.

Btw, a poor person can still get great rates if they have good credit.

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