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And in the extreme you have cases like Vancouver which introduced their Empty Homes Tax, unoccupied residential properties that are unoccupied attract a 1% of v

And in the extreme you have cases like Vancouver which introduced their Empty Homes Tax, unoccupied residential properties that are unoccupied attract a 1% of value tax. I would suggest at least a 2% tax as that matches the IMF's usual inflation target. I would also suggest that the money raised is spent on subsidising affordable housing. But home owners vote far more often than the poor or homeless so they don't want to see the last 30 years of value gains go down the toilet (let alone a margin call if they go underwater).

21 10y ago
It won't be long till a new job appears "dweller of investment house", with job descriptions like "minimal impact on property". Defining what "unoccupied" means will become very important.
- tankenmate 10y ago
  In the case of Vancouver it is already defined. http://vancouver.ca/home-property-development/empty-homes-tax.aspx http://vancouver.ca/home-property-development/empty-homes-ta...
- knappe 10y ago
  This is already a thing and has been for quite a while. One of my former coworkers used to live in really, really nice homes. He was able to do that because he was acting as caretaker for what would have otherwise been unoccupied properties.
- pdelbarba 10y ago
  This is already a thing. You just post an ad on craigslist but the monthly amount you post is actually paid to you. Problem is, you have to make that amount reasonable relative to the other people doing the same thing in your area, otherwise nobody will email you.
rb808 10y ago
Agreed, Empty home tax is good. Also a additional tax for foreign resident owners & second home tax. I think expensive housing is the biggest problem of our generation globally.
- tankenmate 10y ago
  In Australia they have it worse, interest and charges on your mortgage are tax deductible (in Australia this is called negative gearing, even to the point of excluding all other types of negative gearing); it only encourages mum and dad investors to overpay for properties. That added with absent foreign owners looking to park assets overseas out of reach of their local governments. Sydney in particular is heavily affected, in the 5 years to Dec 2016 house prices in Sydney rose 70%, wages 13%. A month ago HuffPo reported that the median house price in Sydney was AUD 805k, and the median wage is AUD 80k; a 10 time multiplier. These days in Sydney if you haven't been able to afford a deposit / mortgage on a house before you are 40 you'll never be able to afford one.
valuearb 10y ago
The Empty Homes Tax is crazy. There is zero reason for an investor to leave a home empty, you still get the benefit of appreciation when you are making rental income. Its foolish not to rent in that case. Cases where homes are vacant are far more likely to be former residents who moved for one reason or another but still want to keep their house. Usually they want to stay in their own home when they make frequent visits. Sometimes they plan to move back and don't want the hassle of renters in their personal home. I for example may be forced to take an out of state job, but I'm never selling the home my children grew up in unless I'm forced to. So I may rent it, or not, depending upon how long I think we will be out of state. Taxing people to force them to rent isn't going to solve much, and is offensive. The real problem is zoning, NIMBYism, and things like that. You want cheaper rents, zone to build more housing, and deal with the greater congestion you brought to your town.
- EliRivers 10y ago
  There is zero reason for an investor to leave a home empty, you still get the benefit of appreciation when you are making rental income. Its foolish not to rent in that case. All that does is apply the label "foolish" to all the people who buy up property and leave it empty. It seems they don't care about being labelled foolish by the likes of the HN community; they still do it. Perhaps they have different motivations or perspectives on this.
  - valuearb 10y ago
    Sure, there are "speculators" and almost exclusively speculation is foolish. It seems great though during a bubble. The best real estate investors who make the real money over the long haul buy properties where the net rents (after maintenance costs) pay for the purchase costs. Then appreciation is simply gravy.
    - zzalpha 10y ago
      Sure, there are "speculators" and almost exclusively speculation is foolish. And yet they do it, and in doing so are driving up home prices in many markets across the globe... which is the core thesis of this article. Your style of argumentation, where you state what people should do, and use that as the basis for ignoring the actual facts, is incredibly ineffective. I understand you have an idealized model of the way capitalism and real estate work. That idealized model does not, in fact, align with reality. In reality, real estate speculation is in fact a real thing, that happens in real places all over the world. So long as demand causes prices to rise significantly faster than those assets depreciate, this type of speculation will happen. Your personal value judgments regarding people engaged in such speculation don't, in fact, cause those people to not exist.
mjevans 10y ago
The money made should not be used as a direct //subsidy//; that only perpetuates the distorted market. Instead that money should be used to encourage the development of additional housing units to increase supply and thus push the price down on the supply/demand curves.

21 10y ago

It won't be long till a new job appears "dweller of investment house", with job descriptions like "minimal impact on property". Defining what "unoccupied" means will become very important.

tankenmate 10y ago
In the case of Vancouver it is already defined. http://vancouver.ca/home-property-development/empty-homes-tax.aspx http://vancouver.ca/home-property-development/empty-homes-ta...
knappe 10y ago
This is already a thing and has been for quite a while. One of my former coworkers used to live in really, really nice homes. He was able to do that because he was acting as caretaker for what would have otherwise been unoccupied properties.
pdelbarba 10y ago
This is already a thing. You just post an ad on craigslist but the monthly amount you post is actually paid to you. Problem is, you have to make that amount reasonable relative to the other people doing the same thing in your area, otherwise nobody will email you.

rb808 10y ago

Agreed, Empty home tax is good. Also a additional tax for foreign resident owners & second home tax. I think expensive housing is the biggest problem of our generation globally.

tankenmate 10y ago
In Australia they have it worse, interest and charges on your mortgage are tax deductible (in Australia this is called negative gearing, even to the point of excluding all other types of negative gearing); it only encourages mum and dad investors to overpay for properties. That added with absent foreign owners looking to park assets overseas out of reach of their local governments. Sydney in particular is heavily affected, in the 5 years to Dec 2016 house prices in Sydney rose 70%, wages 13%. A month ago HuffPo reported that the median house price in Sydney was AUD 805k, and the median wage is AUD 80k; a 10 time multiplier. These days in Sydney if you haven't been able to afford a deposit / mortgage on a house before you are 40 you'll never be able to afford one.

valuearb 10y ago

The Empty Homes Tax is crazy. There is zero reason for an investor to leave a home empty, you still get the benefit of appreciation when you are making rental income. Its foolish not to rent in that case. Cases where homes are vacant are far more likely to be former residents who moved for one reason or another but still want to keep their house. Usually they want to stay in their own home when they make frequent visits. Sometimes they plan to move back and don't want the hassle of renters in their personal home. I for example may be forced to take an out of state job, but I'm never selling the home my children grew up in unless I'm forced to. So I may rent it, or not, depending upon how long I think we will be out of state. Taxing people to force them to rent isn't going to solve much, and is offensive. The real problem is zoning, NIMBYism, and things like that. You want cheaper rents, zone to build more housing, and deal with the greater congestion you brought to your town.

EliRivers 10y ago
There is zero reason for an investor to leave a home empty, you still get the benefit of appreciation when you are making rental income. Its foolish not to rent in that case. All that does is apply the label "foolish" to all the people who buy up property and leave it empty. It seems they don't care about being labelled foolish by the likes of the HN community; they still do it. Perhaps they have different motivations or perspectives on this.
- valuearb 10y ago
  Sure, there are "speculators" and almost exclusively speculation is foolish. It seems great though during a bubble. The best real estate investors who make the real money over the long haul buy properties where the net rents (after maintenance costs) pay for the purchase costs. Then appreciation is simply gravy.
  - zzalpha 10y ago
    Sure, there are "speculators" and almost exclusively speculation is foolish. And yet they do it, and in doing so are driving up home prices in many markets across the globe... which is the core thesis of this article. Your style of argumentation, where you state what people should do, and use that as the basis for ignoring the actual facts, is incredibly ineffective. I understand you have an idealized model of the way capitalism and real estate work. That idealized model does not, in fact, align with reality. In reality, real estate speculation is in fact a real thing, that happens in real places all over the world. So long as demand causes prices to rise significantly faster than those assets depreciate, this type of speculation will happen. Your personal value judgments regarding people engaged in such speculation don't, in fact, cause those people to not exist.

mjevans 10y ago

The money made should not be used as a direct //subsidy//; that only perpetuates the distorted market. Instead that money should be used to encourage the development of additional housing units to increase supply and thus push the price down on the supply/demand curves.