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Related, I’m concerned about the trend of megacorporations gobbling up single-family homes which appears to be happening in the US and Canada. I wonder if it’s

Related, I’m concerned about the trend of megacorporations gobbling up single-family homes which appears to be happening in the US and Canada. I wonder if it’s possible to construct a law that would limit corporate ability to acquire these assets while making it possible for families to do so. Unfortunately, even if there is, politicians at least in DC seem to have zero motivation to solve political problems unless they belong to megacorps or the 0.01% income class.

tomrod 5y ago
Triple or quadruple property taxes after the 10th purchased residence in the state. Encourage tax breaks through high density development of condos with coop property management firms.
- rch 5y ago
  Why not progressively increment after the second? (not mutually exclusive with other measures)
  - tomrod 5y ago
    Local small-time property ownership encourages land liquidity (that isn't our current issue, but is an issue). That model currently looks good up to a 4plex.
    - beaconstudios 5y ago
      Plus you want to encourage models like a housing co-op - they're pretty good for keeping people's housing costs down and building community relations.
  - hotpotamus 5y ago
    I would guess that tomrod owns 9 houses.
    - tomrod 5y ago
      LOL! Nah, I was looking for a simple, reasonable bound was all.
  - franciscop 5y ago
    I've been thinking a lot about this, and I think to promote everyone's owning a house, and even small-size investments, but to avoid megacorps the ideal would be something like: 1 house - tax breaks 2 houses - same taxes as currently for 2 houses 3+ houses - incrementally more expensive with each extra house Also there's a really nice law in Spain, born for the wrong reasons, that makes you pay more taxes if the house is empty vs if someone lives there.
    - Aunche 5y ago
      Why should I, a small time REIT holder, pay more proportionately in property taxes than a celebrity in a Beverly Hills mansion, or even my landlord who only rents out a few, million-dollar units for that matter? I think every individual should be entitled to 500k in preferential property tax (1 million for couples), and every dollar above that should be taxed a lot higher. In places where there is high demand, new housing can also be taxed at the preferential rate some number of years to incentivize development.
      - tomrod 5y ago
        > Why should I, a small time REIT holder pay more proportionately in property taxes than a celebrity in a Beverly Hills mansion, or even my landlord who only rents a few million-dollae units for that matter? To decrease the return on holding property indefinitely, which prevents renters from building equity to the benefit of small-time REIT holders. The outcome of this is an increase in home ownership which has a host of benefits to society. It also helps economic benefits to stay in the local area. Basically, Georgism tax policy - https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism. What benefits do you see REITs provide to a community, beyond increasing your personal wealth? Also, a hard cap of, say, 10 homes without increase would still allow REITs to exist depending on implementation. What is _not_ desirable is a large financial firm like Blackrock or JPMC siphoning off the liquidity of the housing market.
        Aunche 5y ago
        What's better for the housing market: someone who buys a $10 million home for themselves, or someone who buys 10, $1 million dollar apartments and rents them out? If anything, the former should be paying a higher property tax because they're constraining the supply buyer and renter markets. >Basically, Georgism tax policy - https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism. Yes, I largely agree with Georgism, but I don't think incentivizing rich people to buy the largest home possible is within the spirit of Georgism. You'd also run into the problem of people pretending their apartment complex is really just a large mansion. They'd likely spend money on renovations that make the units less desirable to make it classify as a single home. >What benefits do you see REITs provide to a community, beyond increasing your personal wealth? What benefit does my landlord provide that a REIT doesn't? REITs allow me to be invested in real estate without exposing me to too much risk associated with a single location. >Also, a hard cap of, say, 10 homes without increase would still allow REITs to exist depending on implementation. No REIT can exist with 10 homes. That's way too much money proportionally spent on administrating it.
- Wohlf 5y ago
  Pretty sure this would just drive up rental costs.
  - WithinReason 5y ago
    How?
  - tomrod 5y ago
    In a partial equilibrium I could see this, due to management company inefficiencies to scale for small clients versus massive corporate clients. But it would likely be offset by general equilibrium factors pushing down housing prices (demand limiting) which translates to decreased rental pricing (as well as potential for limiting rental supply). I'm not sure how it would qualitatively affect the builder's market.
- joejerryronnie 5y ago
  This would simply drive rents up across the board. Unintended consequences are the primary result of punitive tax measures.
  - tomrod 5y ago
    Would you mind walking through your analysis?
    - Drew_ 5y ago
      They think these taxes will simply be passed onto renters just like the nominal taxes landlords already pay now. The reality is that there is no market for renters that could actually afford these supposed monumental price hikes. So instead landlords would simply be forced to sell their houses, increasing the market supply and decreasing the cost of houses.
      - tomrod 5y ago
        That's the general equilibrium effect I am shooting for -- make it unprofitable for landlords beyond a certain size in an area.
libertine 5y ago
This is one of those things that a proper tax structure would do wonders - those who hoard housing should get a kick from a exponential tax. Like, what value are those corporations bringing to people, to the market, and to a country by hoarding houses other than controlling the renting market for some areas? How is that a good thing?
- refurb 5y ago
  Presumably they are buying up houses to rent. If they buy too many they can’t rent them out, they lose money. I’m not convinced it’s a problem. Again, all roads point back to supply. Build enough homes and the issue is moot.
  - usrn 5y ago
    It's both supply and demand. You need construction and limited immigration. That's why for example Tokyo is so cheap.
    - bombcar 5y ago
      Technically you just need construction to outstrip people looking for homes. One of the problems is people can move quite quickly from one side of a country to another, it's a matter of weeks. But from empty lot to new house is a matter of months at best, years at worst.
      - usrn 5y ago
        Immigration must be limited to the degree that construction can happen. Because it can be raised almost to an arbitrarily high degree it's very easy to overwhelm domestic home production.
- Cthulhu_ 5y ago
  > those who hoard housing should get a kick from a exponential tax. Yes, but at the same time it should not be possible for them to pass those costs on to people renting the house; rents should be fixed, or based on things like floor space and amenities. But personally I think everyone should have a way in to the housing market. Renting is throwing away money; it goes into someone else's pocket and it's gone. When you buy a house you pay off a mortgage on the one hand, and (in today's economy) your property appreciates in value. Combine that with the issue that over here, a mortgage is cheaper than rent, and you can see how it's a huge issue. I've spent something like €50.000 in rent before I finally bought a house; part of that was because I didn't want any longer term commitments, part was because I couldn't afford a house because even then the price of housing was going up sharply already. That's a lot of money that I'll never see again.
bluGill 5y ago
The vast majority of houses are not going to foreigners or corporations. Some do, but it is only a tiny percentage. We need to build more housing, in the end housing costs are about supply and demand.
- user3939382 5y ago
  The problem is more with the trend and where it leads.
- jcranberry 5y ago
  What percentage of new developments are going to foreigners? I looked up some property tax docs of a new luxury apartment building (majority of units go for 2M+) in NYC and I was shocked to see something like 90% of the owners had chinese names. I'm guessing that the majority of these are foreign buyers. I'm also guessing its unlikely that the NYC new development market is being dominated by asian americans?

tomrod 5y ago

Triple or quadruple property taxes after the 10th purchased residence in the state. Encourage tax breaks through high density development of condos with coop property management firms.

rch 5y ago
Why not progressively increment after the second? (not mutually exclusive with other measures)
- tomrod 5y ago
  Local small-time property ownership encourages land liquidity (that isn't our current issue, but is an issue). That model currently looks good up to a 4plex.
  - beaconstudios 5y ago
    Plus you want to encourage models like a housing co-op - they're pretty good for keeping people's housing costs down and building community relations.
- hotpotamus 5y ago
  I would guess that tomrod owns 9 houses.
  - tomrod 5y ago
    LOL! Nah, I was looking for a simple, reasonable bound was all.
- franciscop 5y ago
  I've been thinking a lot about this, and I think to promote everyone's owning a house, and even small-size investments, but to avoid megacorps the ideal would be something like: 1 house - tax breaks 2 houses - same taxes as currently for 2 houses 3+ houses - incrementally more expensive with each extra house Also there's a really nice law in Spain, born for the wrong reasons, that makes you pay more taxes if the house is empty vs if someone lives there.
  - Aunche 5y ago
    Why should I, a small time REIT holder, pay more proportionately in property taxes than a celebrity in a Beverly Hills mansion, or even my landlord who only rents out a few, million-dollar units for that matter? I think every individual should be entitled to 500k in preferential property tax (1 million for couples), and every dollar above that should be taxed a lot higher. In places where there is high demand, new housing can also be taxed at the preferential rate some number of years to incentivize development.
    - tomrod 5y ago
      > Why should I, a small time REIT holder pay more proportionately in property taxes than a celebrity in a Beverly Hills mansion, or even my landlord who only rents a few million-dollae units for that matter? To decrease the return on holding property indefinitely, which prevents renters from building equity to the benefit of small-time REIT holders. The outcome of this is an increase in home ownership which has a host of benefits to society. It also helps economic benefits to stay in the local area. Basically, Georgism tax policy - https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism. What benefits do you see REITs provide to a community, beyond increasing your personal wealth? Also, a hard cap of, say, 10 homes without increase would still allow REITs to exist depending on implementation. What is _not_ desirable is a large financial firm like Blackrock or JPMC siphoning off the liquidity of the housing market.
      - Aunche 5y ago
        What's better for the housing market: someone who buys a $10 million home for themselves, or someone who buys 10, $1 million dollar apartments and rents them out? If anything, the former should be paying a higher property tax because they're constraining the supply buyer and renter markets. >Basically, Georgism tax policy - https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism. Yes, I largely agree with Georgism, but I don't think incentivizing rich people to buy the largest home possible is within the spirit of Georgism. You'd also run into the problem of people pretending their apartment complex is really just a large mansion. They'd likely spend money on renovations that make the units less desirable to make it classify as a single home. >What benefits do you see REITs provide to a community, beyond increasing your personal wealth? What benefit does my landlord provide that a REIT doesn't? REITs allow me to be invested in real estate without exposing me to too much risk associated with a single location. >Also, a hard cap of, say, 10 homes without increase would still allow REITs to exist depending on implementation. No REIT can exist with 10 homes. That's way too much money proportionally spent on administrating it.
Wohlf 5y ago
Pretty sure this would just drive up rental costs.
- WithinReason 5y ago
  How?
- tomrod 5y ago
  In a partial equilibrium I could see this, due to management company inefficiencies to scale for small clients versus massive corporate clients. But it would likely be offset by general equilibrium factors pushing down housing prices (demand limiting) which translates to decreased rental pricing (as well as potential for limiting rental supply). I'm not sure how it would qualitatively affect the builder's market.
joejerryronnie 5y ago
This would simply drive rents up across the board. Unintended consequences are the primary result of punitive tax measures.
- tomrod 5y ago
  Would you mind walking through your analysis?
  - Drew_ 5y ago
    They think these taxes will simply be passed onto renters just like the nominal taxes landlords already pay now. The reality is that there is no market for renters that could actually afford these supposed monumental price hikes. So instead landlords would simply be forced to sell their houses, increasing the market supply and decreasing the cost of houses.
    - tomrod 5y ago
      That's the general equilibrium effect I am shooting for -- make it unprofitable for landlords beyond a certain size in an area.

libertine 5y ago

This is one of those things that a proper tax structure would do wonders - those who hoard housing should get a kick from a exponential tax. Like, what value are those corporations bringing to people, to the market, and to a country by hoarding houses other than controlling the renting market for some areas? How is that a good thing?

refurb 5y ago
Presumably they are buying up houses to rent. If they buy too many they can’t rent them out, they lose money. I’m not convinced it’s a problem. Again, all roads point back to supply. Build enough homes and the issue is moot.
- usrn 5y ago
  It's both supply and demand. You need construction and limited immigration. That's why for example Tokyo is so cheap.
  - bombcar 5y ago
    Technically you just need construction to outstrip people looking for homes. One of the problems is people can move quite quickly from one side of a country to another, it's a matter of weeks. But from empty lot to new house is a matter of months at best, years at worst.
    - usrn 5y ago
      Immigration must be limited to the degree that construction can happen. Because it can be raised almost to an arbitrarily high degree it's very easy to overwhelm domestic home production.
Cthulhu_ 5y ago
> those who hoard housing should get a kick from a exponential tax. Yes, but at the same time it should not be possible for them to pass those costs on to people renting the house; rents should be fixed, or based on things like floor space and amenities. But personally I think everyone should have a way in to the housing market. Renting is throwing away money; it goes into someone else's pocket and it's gone. When you buy a house you pay off a mortgage on the one hand, and (in today's economy) your property appreciates in value. Combine that with the issue that over here, a mortgage is cheaper than rent, and you can see how it's a huge issue. I've spent something like €50.000 in rent before I finally bought a house; part of that was because I didn't want any longer term commitments, part was because I couldn't afford a house because even then the price of housing was going up sharply already. That's a lot of money that I'll never see again.

bluGill 5y ago

The vast majority of houses are not going to foreigners or corporations. Some do, but it is only a tiny percentage. We need to build more housing, in the end housing costs are about supply and demand.

user3939382 5y ago
The problem is more with the trend and where it leads.
jcranberry 5y ago
What percentage of new developments are going to foreigners? I looked up some property tax docs of a new luxury apartment building (majority of units go for 2M+) in NYC and I was shocked to see something like 90% of the owners had chinese names. I'm guessing that the majority of these are foreign buyers. I'm also guessing its unlikely that the NYC new development market is being dominated by asian americans?