3 ms·

>But will building affordable housing be profitable? And if not, will the project be able to repay the loans? (Or if so, why are banks not willing to finance it

>But will building affordable housing be profitable? And if not, will the project be able to repay the loans? (Or if so, why are banks not willing to finance it?) That's my gripe. Nothing will stop the landlords from just jacking the prices. And if they don't, no one competent will run it since they can't make money. Really, the problem here is that critical industries should not be eligible for more than reasonable profit margins.

nordsieck 7y ago
> Nothing will stop the landlords from just jacking the prices. The only thing stopping landlords from "jacking the prices" is vacant supply. > Really, the problem here is that critical industries should not be eligible for more than reasonable profit margins. Price controls for food: it'll work this time!
- jacobolus 7y ago
  You don’t need a price “control” per se. Just tax landlords’ profits progressively, with very steep top marginal rates. If it seems controversial to use that money for some other purpose, return the money as rent subsidies equally among all resident renters.
  - AnthonyMouse 7y ago
    Then all the high income property owners will trade their properties in your city for some other properties in some other city, the properties in your city will all be owned by the retirement funds of middle income people from all over the country who don't pay the high tax rates, and nothing about rents or real estate prices would meaningfully change. Also, to the extent that the tax was actually effective, it would reduce the incentive to build new housing and thereby raise housing costs. > If it seems controversial to use that money for some other purpose, return the money as rent subsidies equally among all resident renters. So you charge them money in tax and give it to the renter, what happens when they respond by raising the rent by that amount?
  - JamesBarney 7y ago
    Currently people invest in real estate expect a certain% return and if it's lower than that they invest in the stock market(or real estate elsewhere). Now imagine we tax half their profits. This would cause two things. Landlords would convert rental units to owner occupied. Because rental units will now have half the value of a rental unit as it would as owner occupied. Then all rental unit developers would stop building until the scarcity of rental units drove up the leasing cost to make being a landlord profitable again.
- allana 7y ago
  > Price controls for food: it'll work this time! Very cheap food is working right now in the USA thanks to incredible subsidies, and it is flooding the world market with tons of cheap food. Agriculture is hugely subsidized in the US, to the point that corn is so worthless it's cheap enough to add or inject into everything. Meanwhile, the USDA manages supply through bulk buys via the Agricultural Marketing Service which it then dumps on schools, low end neighborhoods (Government Cheese being the most famous case of USDA food dumping), food banks, etc.
pjc50 7y ago
For a UK take on this see: http://www.harrowell.org.uk/blog/2013/02/23/the-simple-plan-the-definitive-statement/ http://www.harrowell.org.uk/blog/2013/02/23/the-simple-plan-... The trick is that the local authorities are already paying 100% of the rent for a large category of people, so they might as well cut out the middleman, own the houses, and pay the statute-guaranteed money to themselves.

nordsieck 7y ago

> Nothing will stop the landlords from just jacking the prices. The only thing stopping landlords from "jacking the prices" is vacant supply. > Really, the problem here is that critical industries should not be eligible for more than reasonable profit margins. Price controls for food: it'll work this time!

jacobolus 7y ago
You don’t need a price “control” per se. Just tax landlords’ profits progressively, with very steep top marginal rates. If it seems controversial to use that money for some other purpose, return the money as rent subsidies equally among all resident renters.
- AnthonyMouse 7y ago
  Then all the high income property owners will trade their properties in your city for some other properties in some other city, the properties in your city will all be owned by the retirement funds of middle income people from all over the country who don't pay the high tax rates, and nothing about rents or real estate prices would meaningfully change. Also, to the extent that the tax was actually effective, it would reduce the incentive to build new housing and thereby raise housing costs. > If it seems controversial to use that money for some other purpose, return the money as rent subsidies equally among all resident renters. So you charge them money in tax and give it to the renter, what happens when they respond by raising the rent by that amount?
- JamesBarney 7y ago
  Currently people invest in real estate expect a certain% return and if it's lower than that they invest in the stock market(or real estate elsewhere). Now imagine we tax half their profits. This would cause two things. Landlords would convert rental units to owner occupied. Because rental units will now have half the value of a rental unit as it would as owner occupied. Then all rental unit developers would stop building until the scarcity of rental units drove up the leasing cost to make being a landlord profitable again.
allana 7y ago
> Price controls for food: it'll work this time! Very cheap food is working right now in the USA thanks to incredible subsidies, and it is flooding the world market with tons of cheap food. Agriculture is hugely subsidized in the US, to the point that corn is so worthless it's cheap enough to add or inject into everything. Meanwhile, the USDA manages supply through bulk buys via the Agricultural Marketing Service which it then dumps on schools, low end neighborhoods (Government Cheese being the most famous case of USDA food dumping), food banks, etc.

pjc50 7y ago

For a UK take on this see: http://www.harrowell.org.uk/blog/2013/02/23/the-simple-plan-the-definitive-statement/ http://www.harrowell.org.uk/blog/2013/02/23/the-simple-plan-... The trick is that the local authorities are already paying 100% of the rent for a large category of people, so they might as well cut out the middleman, own the houses, and pay the statute-guaranteed money to themselves.