Hacker News new | past | comments | ask | show | jobs | submit login

You can also get cash out of an asset like land by using it to back loans. So you get the advantage of land appreciation and borrowing money on a tax deductible basis at very low interest rates.

If the land is appreciating at 10%/year then it is a no brainer to borrow against it at 4% (pre tax)




In central areas of Hong Kong island locals who inherit stores at ground level sometimes never bother opening them at all, instead going to banks and using those properties as bargaining chips to get comfortable loans they’d basically live on and/or invest.

This was a point in a presentation about issues in local urban communities I attended a couple years ago. (The dynamic is not great for a community.)


There was some economist on the business TV channels blaming CCP for letting this happen by letting the businesspeople run Hong Kong untrammeled and how that was contributing to the protests


In theory this situation is avoidable under the letter of Chinese property law (the government could decide that your use of property harms public interests and take it from you, though that would be a very extreme interpretation). In practice I imagine banks are just as willing to issue property-backed loans under that system, while the associated corruption and lack of security in own future cause arguably bigger issues in city communities of communist China.

In general the non-use is not very widespread, and partly thanks to 唐樓 architecture there are plenty active small businesses in residential areas (I haven’t seen such abundance while staying in mainland cities). I believe the reason I saw it come up is the existence of active and conscious members of the community who are more invested in its future and sensitive to upcoming issues.




Guidelines | FAQ | Support | API | Security | Lists | Bookmarklet | Legal | Apply to YC | Contact

Search: