Quote:
Originally Posted by MMM
I guess I meant not the CULTURE but the ECONOMICS INFLUENCES that inspire people to build new houses and tear down "old" ones.
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Correlation doesn`t always mean causation.
If we follow the thinking that people build new houses largely because it is cheaper (in fees) to do so - then yes, it can look that way.
But if we look at it from another angle - things can seem a bit different.
The culture of rebuilding houses has been in place for a very long time. Regardless of benefits available to build a house, people would likely still be tearing down and rebuilding. They would just take longer to get the money together to do so, and spend a longer period of time in rental housing. More people in the rental housing, and the cost of rent goes up making it even harder for people to buy homes. But making it cheaper to buy land and houses for everyone doesn`t work, as it just makes it easier for someone to buy land and build apartments... Or wait until all the land around is full of apartments and sell it at a higher price. Even now, most used houses are purchased by speculators who do not live on the property and often leave it in limbo until the value of land rises only to resell it once they think they can make money. There are a number of anti-speculation laws in place but it isn`t that hard to get around by "giving" the land to an employee or renting out the space. This was a huge problem at one point, and people who wanted to buy houses honestly couldn`t because it was so expensive just to live in rental housing that there was virtually no hope of saving the money to build a home.
Instead of penalizing speculators or businesses... This is where real buyers are rewarded. Under the current laws, benefits for purchasing or building a new home can only be used
once. If you buy a new house or build one, that`s it. You can never take advantage of the benefits again even if you build or buy another new house. This makes it easier for a family to buy a real home, which in turn keeps rental costs lower, which makes it easier for other families to buy homes, and so on (and as a distant result more money comes in as property tax...). It also makes it less likely that employees will "pose" as real buyers as they will lose their benefits for when they really do want to buy a home.
What the construction companies have done is gotten protection for the cost of raw materials - much like Japanese produced rice has protection. This keeps the price of the materials at a certain rate. They take advantage of people building new houses, but the reasons behind the tax benefits, etc, are unrelated in my eyes. The goal is to penalize speculators - but instead of giving them the chance to find loopholes by making it a straight penalty... There is a "reward" of sorts for not being one.
In terms of the benefits for building/buying new - I think it works quite well in the way it is intended. Construction companies taking advantage of the culture kind of sucks, but it`s not the reason laws regarding new building exist.