5 ms·

Alternatively, they could cease to become landlords, by ceding the properties to someone who will actually rent out the units, or buy it and actually live there

Alternatively, they could cease to become landlords, by ceding the properties to someone who will actually rent out the units, or buy it and actually live there. Obviously 1M/day is ridiculous, but even in that obscene case there are conceivably financial institutions that would be willing to take the real estate off your hands - or you can gift it to the federal government, which can sell it to someone who actually wants to live there rather than contribute to the constriction of supply.

whatshisface 4y ago
>by ceding the properties to someone who will actually rent out the units, or buy it and actually live there. Unfortunately, the vacancies I am describing are unavoidable, because people do not rent apartments forever and empty apartments cannot instantly be leased. >there are conceivably financial institutions that would be willing to take the real estate off your hands And pay the vacancy tax themselves? They'd be in the same position as the previous owners.
- LordDragonfang 4y ago
  If the taxes are not the obvious hyperbole of 1M/day, there are equilibrium options which result in the scenarios I laid out - and even accepting that ridiculous premise, there is the escape hatch for giving it the federal government the day-of, who obviously don't care about paying taxes to themselves. The point is that there are logical paths where even punitive (or intentionally ridiculous) levels of vacancy taxes result in a decrease in real prices.
  - whatshisface 4y ago
    >there are equilibrium options which result in the scenarios I laid out Yes, but they are that the tenants pay the taxes. Capitalists are free to move their money anywhere they want to keep the return on investment up, but people must live somewhere.
    - banannaise 4y ago
      An owner-occupier would naturally not have to worry about vacancy taxes. If you are a landlord, can't afford the vacancy tax, and would lose money on tenancy, eventually your most efficient option is to simply give away the home to someone who will happily take it.
ajmurmann 4y ago
Sounds like a great way to make owning and building apartment buildings let's attractive.
- LordDragonfang 4y ago
  Owning buildings, yes. In this hypothetical and ridiculous scenario, the only people buying would be those who intended to live there. This would decrease prices (it is no longer a speculative asset) and increase home ownership rate. Functionally no one would own a whole apartment building just to rent it out. Individual units would end up being sold the way condos are. Building "apartment" buildings would still be attractive, because they could be sold as condo units. With no one willing to rent, there would a more direct demand from actual buyers. Let me once again reiterate that the 1M/day vacancy tax is an obviously ridiculous proposal, and any real-world policy would have many more caveats and be orders of magnitude less radical. But even something so obscenely and grossly unrealistic has potential for solving the supply issue, so we should be considering the more moderate solutions.
  - abofh 4y ago
    Even then no, I build a 30 unit building, covid 22 hits, nobodies buying, I'm on the hook for 30mm / day. Nobody would even build with that risk. You'd have low density housing, single unit homes and massive traffic/pollution issues often associated with suburban sprawl. Yes, 1m/day is hyperbolic, but if you put the constraint on the suppliers (builders, owners), and the demand is inelastic (you've got to live somewhere), then the outcome is to constrain supply for maximal benefit.
    - LordDragonfang 4y ago
      1) Buyers can be arranged during construction 2) A builder can hypothetically continue "building"/renovating the units indefinitely until they have a buyer. Alternatively, nothing about this hypothetical scenario requires the original constructor to even pay the $1M in the first place - it could be deferred, or be another rate entirely. Side note) Landlords/owners aren't suppliers, they are speculators.

whatshisface 4y ago

>by ceding the properties to someone who will actually rent out the units, or buy it and actually live there. Unfortunately, the vacancies I am describing are unavoidable, because people do not rent apartments forever and empty apartments cannot instantly be leased. >there are conceivably financial institutions that would be willing to take the real estate off your hands And pay the vacancy tax themselves? They'd be in the same position as the previous owners.

LordDragonfang 4y ago
If the taxes are not the obvious hyperbole of 1M/day, there are equilibrium options which result in the scenarios I laid out - and even accepting that ridiculous premise, there is the escape hatch for giving it the federal government the day-of, who obviously don't care about paying taxes to themselves. The point is that there are logical paths where even punitive (or intentionally ridiculous) levels of vacancy taxes result in a decrease in real prices.
- whatshisface 4y ago
  >there are equilibrium options which result in the scenarios I laid out Yes, but they are that the tenants pay the taxes. Capitalists are free to move their money anywhere they want to keep the return on investment up, but people must live somewhere.
  - banannaise 4y ago
    An owner-occupier would naturally not have to worry about vacancy taxes. If you are a landlord, can't afford the vacancy tax, and would lose money on tenancy, eventually your most efficient option is to simply give away the home to someone who will happily take it.

ajmurmann 4y ago

Sounds like a great way to make owning and building apartment buildings let's attractive.

LordDragonfang 4y ago
Owning buildings, yes. In this hypothetical and ridiculous scenario, the only people buying would be those who intended to live there. This would decrease prices (it is no longer a speculative asset) and increase home ownership rate. Functionally no one would own a whole apartment building just to rent it out. Individual units would end up being sold the way condos are. Building "apartment" buildings would still be attractive, because they could be sold as condo units. With no one willing to rent, there would a more direct demand from actual buyers. Let me once again reiterate that the 1M/day vacancy tax is an obviously ridiculous proposal, and any real-world policy would have many more caveats and be orders of magnitude less radical. But even something so obscenely and grossly unrealistic has potential for solving the supply issue, so we should be considering the more moderate solutions.
- abofh 4y ago
  Even then no, I build a 30 unit building, covid 22 hits, nobodies buying, I'm on the hook for 30mm / day. Nobody would even build with that risk. You'd have low density housing, single unit homes and massive traffic/pollution issues often associated with suburban sprawl. Yes, 1m/day is hyperbolic, but if you put the constraint on the suppliers (builders, owners), and the demand is inelastic (you've got to live somewhere), then the outcome is to constrain supply for maximal benefit.
  - LordDragonfang 4y ago
    1) Buyers can be arranged during construction 2) A builder can hypothetically continue "building"/renovating the units indefinitely until they have a buyer. Alternatively, nothing about this hypothetical scenario requires the original constructor to even pay the $1M in the first place - it could be deferred, or be another rate entirely. Side note) Landlords/owners aren't suppliers, they are speculators.