4 ms·

In the common conception of markets no seller has enough power to sit on their laurels, they must sell their product in order to survive. It seems wrong to me t

In the common conception of markets no seller has enough power to sit on their laurels, they must sell their product in order to survive. It seems wrong to me that in the real estate market liquidity would drop as prices drop. There needs to be a cost associated with holding real estate so that there is turnover in good times and bad times.

theamk 8y ago
Like property taxes, perhaps? (unfortunately(?), many states do not have them)
jessaustin 8y ago
Owners of real estate already pay property taxes. Are you just proposing that those be increased? And you think that will make real estate more valuable? I'm missing something here...
- frgtpsswrdlame 8y ago
  >Are you just proposing that those be increased? Sure, or an additional tax on unused or barely used real estate if we wanted to be targeted, but really I like the broad property tax. >And you think that will make real estate more valuable? No, I'm not trying to make real estate more valuable, actually I'm trying to make it less valuable by ensuring that the high levels of competition we see in booming real estate times carries over to the busts. If the costs are so low that people are just sitting on these properties and waiting for a magical moment when prices rise then obviously costs need to be increased to pressure these people to enter the market. Liquidity shouldn't drop when prices drop.
  - jessaustin 8y ago
    Increasing property tax in general is less bad than this "unused or barely used" tax idea. That sounds like a good way to turn all old malls into flea markets. That is, big messy places where anyone can sell anything she wants out of the back of her van, for $5 a day. "Anything she wants" will include a wide variety of items to which neighbors will object strenuously. In addition to the unsavory sales activity, other unsavory activity will also take place. There's no way any taxation scheme will pay for the required extra policing. I won't be surprised if we don't see this happen...
- bryondowd 8y ago
  He didn't say anything about making it more valuable, just that it would increase liquidity. In other words, the idea would be to prevent property from sitting dormant in a bad market, as an owner who has no profitable use for the property would be forced to sell it to someone who does, to get at least some value out of it before the tax eats all the value. Perhaps something like an abandonment tax could accomplish this. Force owners to either sell it or use it. Even if they aren't using it optimally, just requiring some minimum usage to avoid a heavy penalty tax could go a long way to eliminating properties that are just tied up by someone hoping the value goes up eventually.
- dredmorbius 8y ago
  Land value tax: a levy on the unimproved value of land. It actually depresses the price of land, by socialising the positive value. But it also increases the available supply, paradoxically: given that land is price-inelastic, the supply doesn't change relative to price. Increase the carrying cost and the result is that landlords must sell or rent in order to cover costs. This is particularly associated with Henry George, though his work was based heavily on David Ricardo and Adam Smith. https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax http://www.ft.com/cms/s/2/392c33a6-211f-11e3-8aff-00144feab7de.html#axzz2g78MTFik http://www.ft.com/cms/s/2/392c33a6-211f-11e3-8aff-00144feab7... (Alternate: http://archive.is/iQMRn http://archive.is/iQMRn )
wz1000 8y ago
https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax

theamk 8y ago

Like property taxes, perhaps? (unfortunately(?), many states do not have them)

jessaustin 8y ago

Owners of real estate already pay property taxes. Are you just proposing that those be increased? And you think that will make real estate more valuable? I'm missing something here...

frgtpsswrdlame 8y ago
>Are you just proposing that those be increased? Sure, or an additional tax on unused or barely used real estate if we wanted to be targeted, but really I like the broad property tax. >And you think that will make real estate more valuable? No, I'm not trying to make real estate more valuable, actually I'm trying to make it less valuable by ensuring that the high levels of competition we see in booming real estate times carries over to the busts. If the costs are so low that people are just sitting on these properties and waiting for a magical moment when prices rise then obviously costs need to be increased to pressure these people to enter the market. Liquidity shouldn't drop when prices drop.
- jessaustin 8y ago
  Increasing property tax in general is less bad than this "unused or barely used" tax idea. That sounds like a good way to turn all old malls into flea markets. That is, big messy places where anyone can sell anything she wants out of the back of her van, for $5 a day. "Anything she wants" will include a wide variety of items to which neighbors will object strenuously. In addition to the unsavory sales activity, other unsavory activity will also take place. There's no way any taxation scheme will pay for the required extra policing. I won't be surprised if we don't see this happen...
bryondowd 8y ago
He didn't say anything about making it more valuable, just that it would increase liquidity. In other words, the idea would be to prevent property from sitting dormant in a bad market, as an owner who has no profitable use for the property would be forced to sell it to someone who does, to get at least some value out of it before the tax eats all the value. Perhaps something like an abandonment tax could accomplish this. Force owners to either sell it or use it. Even if they aren't using it optimally, just requiring some minimum usage to avoid a heavy penalty tax could go a long way to eliminating properties that are just tied up by someone hoping the value goes up eventually.
dredmorbius 8y ago
Land value tax: a levy on the unimproved value of land. It actually depresses the price of land, by socialising the positive value. But it also increases the available supply, paradoxically: given that land is price-inelastic, the supply doesn't change relative to price. Increase the carrying cost and the result is that landlords must sell or rent in order to cover costs. This is particularly associated with Henry George, though his work was based heavily on David Ricardo and Adam Smith. https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax http://www.ft.com/cms/s/2/392c33a6-211f-11e3-8aff-00144feab7de.html#axzz2g78MTFik http://www.ft.com/cms/s/2/392c33a6-211f-11e3-8aff-00144feab7... (Alternate: http://archive.is/iQMRn http://archive.is/iQMRn )

wz1000 8y ago

https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax