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Counterpoint: why should people not be slightly disincentivized from owning two homes when they only need one? Even further, I personally think that people sho

Counterpoint: why should people not be slightly disincentivized from owning two homes when they only need one? Even further, I personally think that people should be disincentivized from renting their homes as well (though not in a way that would just be passed to the renter, ie tax). I live in a college town that suffers from extremely low inventory because housing values keep going up and there's never a shortage of people willing to rent so nobody sells anything, they just keep it and pay a property management company to rent it out.

icebraining 9y ago
If some people stopped renting in your town to sell their house, wouldn't some renter be left out as well? Isn't that just an indication that there aren't enough houses to go around?
- pdelbarba 9y ago
  Assuming there was a body of renters that could afford houses in the area, the changeover would be net zero. That said, you're right that there's a housing shortage in general.
loeg 9y ago
Transaction costs for selling a house are around 10%. So it pays in a big way to reduce the number of housing transactions you make.
- pdelbarba 9y ago
  Fair point, but this doesn't really answer the question. Also, following this tangent, would it be reasonable to attempt to decrease the transaction costs to drive up inventory (carrot vs stick)?
  - loeg 9y ago
    To answer the question: landlording does provide a service. You can afford a place to live without having a down payment's worth of assets. This is useful for a big chunk of the population. If you make landlording not profitable or too risky, rental stock decreases and rents rise on the remaining stock. I do think it would make sense to attempt to decrease transaction costs in order to increase market liquidity and efficiency. Unfortunately, there are some hard physical minimum costs in there that are pretty significant (evaluation, moving, legal stuff). But perhaps realtor premiums could be reduced. To actually get prices to come down, you need to increase supply. We're not getting any more land, but there's clearly plenty of space, at least in the US. But cities are popular right now and it's hard to imagine that changing soon. As far as housing stock, upzoning/increased density can contribute to supply and lower prices.

icebraining 9y ago

If some people stopped renting in your town to sell their house, wouldn't some renter be left out as well? Isn't that just an indication that there aren't enough houses to go around?

pdelbarba 9y ago
Assuming there was a body of renters that could afford houses in the area, the changeover would be net zero. That said, you're right that there's a housing shortage in general.

loeg 9y ago

Transaction costs for selling a house are around 10%. So it pays in a big way to reduce the number of housing transactions you make.

pdelbarba 9y ago
Fair point, but this doesn't really answer the question. Also, following this tangent, would it be reasonable to attempt to decrease the transaction costs to drive up inventory (carrot vs stick)?
- loeg 9y ago
  To answer the question: landlording does provide a service. You can afford a place to live without having a down payment's worth of assets. This is useful for a big chunk of the population. If you make landlording not profitable or too risky, rental stock decreases and rents rise on the remaining stock. I do think it would make sense to attempt to decrease transaction costs in order to increase market liquidity and efficiency. Unfortunately, there are some hard physical minimum costs in there that are pretty significant (evaluation, moving, legal stuff). But perhaps realtor premiums could be reduced. To actually get prices to come down, you need to increase supply. We're not getting any more land, but there's clearly plenty of space, at least in the US. But cities are popular right now and it's hard to imagine that changing soon. As far as housing stock, upzoning/increased density can contribute to supply and lower prices.