5 ms·

Why not implement a massive property tax hike for non-owner occupied units - with exemptions for apartment complexes & other properties designed as rentals? So

Why not implement a massive property tax hike for non-owner occupied units - with exemptions for apartment complexes & other properties designed as rentals? Something along the lines of 15x the property tax for units not owner occupied for at least 2/3 of the year / ownership period (if less than a year).

dkopi 11y ago
Tax hikes aren't a way to lower housing costs. You don't make something cheaper by taxing it.
- benzofuran 11y ago
  If the tax disincentivizes boomers from buying real estate at asinine prices and then seeking rents to pay the resulting mortgages as an alternative to the stock market, then that should make property cheaper as it reduces the demand.
  - dkopi 11y ago
    In a market with limited supply, taxing homes for rent will raise rents to cover the additional taxes. You don't solve a supply problem by adding taxes. If anything, that will reduce the supply even more.
    - Grishnakh 11y ago
      No, you need to massively jack up taxes to increase supply, and it will work. But you don't jack up taxes on homes for rent, you jack them up on the homes that aren't for rent: houses which are just sitting unoccupied. The taxes will encourage the owners to either rent them out or simply sell them off to someone who will (or who will at least live there). That increases supply.
- Johnny555 11y ago
  Yeah, I didn't get his logic, landlords don't pay property taxes, tenants do (though the tax benefit goes to the landlord). Raising the cost to landlords in an sellers market like SF is just going to drive up rents - and Landlords will certainly be able to pass through their higher costs even to rent controlled tenants.
- Grishnakh 11y ago
  In some cases, you can. One apparent problem in SanFran (and I've heard of it in NYC too) is unoccupied properties, which could be used for housing but aren't because their owners prefer to just sit on it and not use it at all (maybe it's a vacation residence or they're speculating its value will rise). If you stick a massive tax on that, that deters that kind of behavior, and forces them to either rent out the property, or sell to someone who will either live in it or rent it out. This will increase the housing supply, which would then decrease the cost of housing overall by providing more supply and more competition. This wouldn't be a tax that people would actually pay, unless they're stupid; they would take steps to avoid paying the tax altogether. Taxes don't make stuff more expensive: they deter behavior. The simple rule is: if you want less of something, tax it. Now, this isn't always true, but to an extent it usually is, especially for consumption. (It's not really true of income taxes usually; everyone usually wants more income, and needs some amount of income, so a tax on that income doesn't discourage that, unless the tax is so high or so wacky that it discourages working for additional income.) Here, we want people to stop leaving properties unoccupied, so we slap a giant tax on that so they'll stop doing it.
ThrustVectoring 11y ago
Proposition 13. It's against the California constitution to do so.
acomjean 11y ago
We have that in Cambridge MA. Buts its the other way around, your assessed property value is lowered for tax purposes if you live there. Honestly in my building near harvard square this hasn't seemed to prevent those from moving out from renting (rents have gone a little nuts here too). Its a decent idea, as it incentives people to sell when they move. We have had some people cashing out, because values are high. "The City of Cambridge offers a residential exemption to property that serves as a property owner’s principal residence. To be eligible for FY17, the owner must own and occupy their property as their principal residence on January 1, 2016 shown on 2015 Massachusetts Income Tax." https://www.cambridgema.gov/assess https://www.cambridgema.gov/assess

dkopi 11y ago

Tax hikes aren't a way to lower housing costs. You don't make something cheaper by taxing it.

benzofuran 11y ago
If the tax disincentivizes boomers from buying real estate at asinine prices and then seeking rents to pay the resulting mortgages as an alternative to the stock market, then that should make property cheaper as it reduces the demand.
- dkopi 11y ago
  In a market with limited supply, taxing homes for rent will raise rents to cover the additional taxes. You don't solve a supply problem by adding taxes. If anything, that will reduce the supply even more.
  - Grishnakh 11y ago
    No, you need to massively jack up taxes to increase supply, and it will work. But you don't jack up taxes on homes for rent, you jack them up on the homes that aren't for rent: houses which are just sitting unoccupied. The taxes will encourage the owners to either rent them out or simply sell them off to someone who will (or who will at least live there). That increases supply.
Johnny555 11y ago
Yeah, I didn't get his logic, landlords don't pay property taxes, tenants do (though the tax benefit goes to the landlord). Raising the cost to landlords in an sellers market like SF is just going to drive up rents - and Landlords will certainly be able to pass through their higher costs even to rent controlled tenants.
Grishnakh 11y ago
In some cases, you can. One apparent problem in SanFran (and I've heard of it in NYC too) is unoccupied properties, which could be used for housing but aren't because their owners prefer to just sit on it and not use it at all (maybe it's a vacation residence or they're speculating its value will rise). If you stick a massive tax on that, that deters that kind of behavior, and forces them to either rent out the property, or sell to someone who will either live in it or rent it out. This will increase the housing supply, which would then decrease the cost of housing overall by providing more supply and more competition. This wouldn't be a tax that people would actually pay, unless they're stupid; they would take steps to avoid paying the tax altogether. Taxes don't make stuff more expensive: they deter behavior. The simple rule is: if you want less of something, tax it. Now, this isn't always true, but to an extent it usually is, especially for consumption. (It's not really true of income taxes usually; everyone usually wants more income, and needs some amount of income, so a tax on that income doesn't discourage that, unless the tax is so high or so wacky that it discourages working for additional income.) Here, we want people to stop leaving properties unoccupied, so we slap a giant tax on that so they'll stop doing it.

ThrustVectoring 11y ago

Proposition 13. It's against the California constitution to do so.

acomjean 11y ago

We have that in Cambridge MA. Buts its the other way around, your assessed property value is lowered for tax purposes if you live there. Honestly in my building near harvard square this hasn't seemed to prevent those from moving out from renting (rents have gone a little nuts here too). Its a decent idea, as it incentives people to sell when they move. We have had some people cashing out, because values are high. "The City of Cambridge offers a residential exemption to property that serves as a property owner’s principal residence. To be eligible for FY17, the owner must own and occupy their property as their principal residence on January 1, 2016 shown on 2015 Massachusetts Income Tax." https://www.cambridgema.gov/assess https://www.cambridgema.gov/assess