5 ms·

Price controls are ineffective long term but can be a useful stopgap measure in the short term. The only solution to this is dealing with supplyside issues, not

by jmyeet 4y ago

Price controls are ineffective long term but can be a useful stopgap measure in the short term. The only solution to this is dealing with supplyside issues, notably the artificial constraints on housing supply. This is longer term.So the pricing algorithms are a natural reaction to market forces. Here are some more important things you can do in the short term to increase supply: 1. Outlaw (at the local and state level) and punitively tax (at the Federal level) short-term rentals (eg AirBnB/VRBO). The evidence that these reduce the supply of rental units is undeniable. It's not even capital intensive as people will rent units where the lease allows them to sublet short-term; 2. Start punitively taxing second homes; 3. Punitively tax ultra-luxury housing supply. In the longer term the government should temper these market forces by creating an alternative source for housing by buying and building housing units that are rented to people on reasonable terms.

UncleOxidant 4y ago
> 2. Start punitively taxing second homes; I'm assuming you mean punitively tax 2nd homes that aren't being rented out?
- jmyeet 4y ago
  I distinguish between "investment property" and "second homes". An investment property is a working asset that's specifically there to generate income (eg by renting it out). "Second homes" here are really non-working assets (eg the family lake house).
  - calvinmorrison 4y ago
    but lake houses and beach houses are seasonal and have little demand year round
    - nullc 4y ago
      And usually in locations where the housing market isn't congested and where building additional units (especially if you don't care if they have a view) would be no big deal.
- deleted 4y ago
  [deleted]
thriftwy 4y ago
If you tax second homes, people will not buy these, not put them out for rent, and developers will build fewer real estate. This may only benefit if you have already borked your real estate market so that virtually nothing gets built anyway.
- jmyeet 4y ago
  If you believe this I'm afraid that you have successfully been brainwashed by Atlas Shrugged propaganda that dominates American politics. It is the idea that we have to kowtow to bosses ("capitalists") otherwise they won't provide those jobs or will leave. It's a ridiculou snotion. The only thing that will stop capitalists doing capitalism is that it won't be profitable. In a lot of places we aren't building things because we can't (eg in most of the US it is quite literally illegal to build anything other than SFHs) and what we are building in a lot of places isn't aimed at normal people (eg the ultra-luxury skinny-tall towers in Manhattan).
  - gruez 4y ago
    >It is the idea that we have to kowtow to bosses ("capitalists") otherwise they won't provide those jobs or will leave. It's a ridiculou snotion. You have to "kowtow" to capitalists because they control resources which are required for new housing to get built. Nothing will change that short of a full communist revolution, which most people aren't too keen on. >The only thing that will stop capitalists doing capitalism is that it won't be profitable. >In a lot of places we aren't building things because we can't (eg in most of the US it is quite literally illegal to build anything other than SFHs) and what we are building in a lot of places isn't aimed at normal people (eg the ultra-luxury skinny-tall towers in Manhattan). You got cause and effect reversed. The reason why only luxury apartments/houses are being built in those areas is because the land value/zoning means that the only rich people can pay those prices, and they want luxury homes. Mandating that only crappy homes can be built doesn't really fix the issue, because rich people will still buy those homes and renovate it themselves to make it luxury.
- ilammy 4y ago
  > If you tax second homes, people will not buy these, not put them out for rent Which is exactly the point of the policy. If the society recognizes that private landlordship is net negative like smoking, it’s expected to be regulated out of existence. Why should people wanting to buy a second home be given priority over people wanting to buy their first, from the moral stance?
Ancalagon 4y ago
I feel like the damage from capitalism has already been done and point three would just restrict future supply even further by making new construction even less profitable. Most places needing new construction aren’t in areas where developers would really consider building ultra luxury anyways
mjevans 4y ago
You're close, and those are all reasonable steps. Re 2: My test is, the owner(s) (all on the title) must _reside_ in the house for at least 35% of the year. That allows summer / winter homes for snowbirds, as well as moves, but makes it impossible to get the tax break on 3 properties in a given year. House ZONING, anti-NIMBY, is also a major contributing factor. There should be rules much more like Japan's 'impact based' zoning, and automatic approval for plans that obviously surpass minimum standards for various E.G. environmental impact assessments and other forms of red tape. These benefits should also be structured to encourage housing within existing impacted areas (cities, improve density), and give benefits for exceeding minimum codes and being less impactful than allowed.
- mike00632 4y ago
  I don't even have a single house and you're worried about a second house being taxed too much?
  - gruez 4y ago
    That might be true, but depending on the area you live in the amount of people with 2 homes might be a big/politically active enough voting bloc that can sink any legislation. If that's the case it's better to add that exemption so you can get something passed.
mikebenfield 4y ago
I don’t understand this perspective. Are you really confident those measures will increase supply? I’m not. I find it really hard to predict what the outcome of any of those measures would be. How about this one: 4. Stop artificially restricting the goddamn housing supply and catering NIMBYs, and instead allow housing of reasonable quantity and density to be built.
- mihaic 4y ago
  While NIMBY might be a cause in some parts of the US, absurd increases in housing costs are happening worldwide, in all kinds of markets. The only way for housing to become affordable is to have homeowners take a hit in their valuation, every other solution is ultimately futile.
  - mikebenfield 4y ago
    Yeah… so are you implying that the solutions proposed by the other post - like punitively taxing second homes - are more universal solutions to the housing crisis than building more housing?
notch656a 4y ago
More taxes are the answer to cheaper housing!
mihaic 4y ago
The fact that you're actually presenting a reasonable solution and you're being downvoted shows how much capitalist propaganda has poluted the mainstream. Either that, or the majority of people here are real estate speculators, which I very much doubt.
- nullc 4y ago
  I think you might be reading the post differently from the people downvoting it. Why would punitively taxing vacation homes, which are almost always outside of urban / dense-surban locations where there is little housing market congestion and where building additional housing units is straight forward -- do anything to help things? Why would punitively taxing the "ultra-luxury housing supply" do anything substantial for the issue being discussed? To me, these points made the post sound like a class-war rallying cry rather than an effort at reasonable solutions. Punitively taxing housing used by the wealthy isn't going to address the issue-- even if its successful at driving them out of the area there are so few that it wont make a dent in the market. I'm disappointed in the lack of creativity in the proposals people advance. How about in regions where density is already over some threshold large employers should be required to have at least some threshold of their role qualified office workers working remotely? Remote workers can consume less square footage (less office space, less parking) and can locate themselves outside of the highest demand locations. Surely there must be other alternatives other than just the density treadmill. While increasing density can also be a useful tool, it has the unfortunate effect of making the property even more valuable which works counter to the goal of affordability. In California we should end the prop 13 windfall for rental properties, and at the very least allow rental properties taxes to rise with rental rates. Current policy can create weird effects like houses where if they were sold the increase in taxes would be comparable to the current rent, which essentially locks them into being rental... and even when it's not that extreme it creates a significant advantage in favor of long-time landlords vs recent buyers.
  - mihaic 4y ago
    As in most real-world scenarios, multiple solutions are needed, and it's best to first agree on the goal you want. To me these would be more availability while also disincentivising real estate as an investment vehicle. I know that's not a direction most people agree on (hitting real estate as an investment), but there really is no other way I see.

by jmyeet 4y ago

UncleOxidant 4y ago

> 2. Start punitively taxing second homes; I'm assuming you mean punitively tax 2nd homes that aren't being rented out?

jmyeet 4y ago
I distinguish between "investment property" and "second homes". An investment property is a working asset that's specifically there to generate income (eg by renting it out). "Second homes" here are really non-working assets (eg the family lake house).
- calvinmorrison 4y ago
  but lake houses and beach houses are seasonal and have little demand year round
  - nullc 4y ago
    And usually in locations where the housing market isn't congested and where building additional units (especially if you don't care if they have a view) would be no big deal.
deleted 4y ago
[deleted]

thriftwy 4y ago

If you tax second homes, people will not buy these, not put them out for rent, and developers will build fewer real estate. This may only benefit if you have already borked your real estate market so that virtually nothing gets built anyway.

jmyeet 4y ago
If you believe this I'm afraid that you have successfully been brainwashed by Atlas Shrugged propaganda that dominates American politics. It is the idea that we have to kowtow to bosses ("capitalists") otherwise they won't provide those jobs or will leave. It's a ridiculou snotion. The only thing that will stop capitalists doing capitalism is that it won't be profitable. In a lot of places we aren't building things because we can't (eg in most of the US it is quite literally illegal to build anything other than SFHs) and what we are building in a lot of places isn't aimed at normal people (eg the ultra-luxury skinny-tall towers in Manhattan).
- gruez 4y ago
  >It is the idea that we have to kowtow to bosses ("capitalists") otherwise they won't provide those jobs or will leave. It's a ridiculou snotion. You have to "kowtow" to capitalists because they control resources which are required for new housing to get built. Nothing will change that short of a full communist revolution, which most people aren't too keen on. >The only thing that will stop capitalists doing capitalism is that it won't be profitable. >In a lot of places we aren't building things because we can't (eg in most of the US it is quite literally illegal to build anything other than SFHs) and what we are building in a lot of places isn't aimed at normal people (eg the ultra-luxury skinny-tall towers in Manhattan). You got cause and effect reversed. The reason why only luxury apartments/houses are being built in those areas is because the land value/zoning means that the only rich people can pay those prices, and they want luxury homes. Mandating that only crappy homes can be built doesn't really fix the issue, because rich people will still buy those homes and renovate it themselves to make it luxury.
ilammy 4y ago
> If you tax second homes, people will not buy these, not put them out for rent Which is exactly the point of the policy. If the society recognizes that private landlordship is net negative like smoking, it’s expected to be regulated out of existence. Why should people wanting to buy a second home be given priority over people wanting to buy their first, from the moral stance?

Ancalagon 4y ago

I feel like the damage from capitalism has already been done and point three would just restrict future supply even further by making new construction even less profitable. Most places needing new construction aren’t in areas where developers would really consider building ultra luxury anyways

mjevans 4y ago

You're close, and those are all reasonable steps. Re 2: My test is, the owner(s) (all on the title) must _reside_ in the house for at least 35% of the year. That allows summer / winter homes for snowbirds, as well as moves, but makes it impossible to get the tax break on 3 properties in a given year. House ZONING, anti-NIMBY, is also a major contributing factor. There should be rules much more like Japan's 'impact based' zoning, and automatic approval for plans that obviously surpass minimum standards for various E.G. environmental impact assessments and other forms of red tape. These benefits should also be structured to encourage housing within existing impacted areas (cities, improve density), and give benefits for exceeding minimum codes and being less impactful than allowed.

mike00632 4y ago
I don't even have a single house and you're worried about a second house being taxed too much?
- gruez 4y ago
  That might be true, but depending on the area you live in the amount of people with 2 homes might be a big/politically active enough voting bloc that can sink any legislation. If that's the case it's better to add that exemption so you can get something passed.

mikebenfield 4y ago

I don’t understand this perspective. Are you really confident those measures will increase supply? I’m not. I find it really hard to predict what the outcome of any of those measures would be. How about this one: 4. Stop artificially restricting the goddamn housing supply and catering NIMBYs, and instead allow housing of reasonable quantity and density to be built.

mihaic 4y ago
While NIMBY might be a cause in some parts of the US, absurd increases in housing costs are happening worldwide, in all kinds of markets. The only way for housing to become affordable is to have homeowners take a hit in their valuation, every other solution is ultimately futile.
- mikebenfield 4y ago
  Yeah… so are you implying that the solutions proposed by the other post - like punitively taxing second homes - are more universal solutions to the housing crisis than building more housing?

notch656a 4y ago

More taxes are the answer to cheaper housing!

mihaic 4y ago

The fact that you're actually presenting a reasonable solution and you're being downvoted shows how much capitalist propaganda has poluted the mainstream. Either that, or the majority of people here are real estate speculators, which I very much doubt.

nullc 4y ago
I think you might be reading the post differently from the people downvoting it. Why would punitively taxing vacation homes, which are almost always outside of urban / dense-surban locations where there is little housing market congestion and where building additional housing units is straight forward -- do anything to help things? Why would punitively taxing the "ultra-luxury housing supply" do anything substantial for the issue being discussed? To me, these points made the post sound like a class-war rallying cry rather than an effort at reasonable solutions. Punitively taxing housing used by the wealthy isn't going to address the issue-- even if its successful at driving them out of the area there are so few that it wont make a dent in the market. I'm disappointed in the lack of creativity in the proposals people advance. How about in regions where density is already over some threshold large employers should be required to have at least some threshold of their role qualified office workers working remotely? Remote workers can consume less square footage (less office space, less parking) and can locate themselves outside of the highest demand locations. Surely there must be other alternatives other than just the density treadmill. While increasing density can also be a useful tool, it has the unfortunate effect of making the property even more valuable which works counter to the goal of affordability. In California we should end the prop 13 windfall for rental properties, and at the very least allow rental properties taxes to rise with rental rates. Current policy can create weird effects like houses where if they were sold the increase in taxes would be comparable to the current rent, which essentially locks them into being rental... and even when it's not that extreme it creates a significant advantage in favor of long-time landlords vs recent buyers.
- mihaic 4y ago
  As in most real-world scenarios, multiple solutions are needed, and it's best to first agree on the goal you want. To me these would be more availability while also disincentivising real estate as an investment vehicle. I know that's not a direction most people agree on (hitting real estate as an investment), but there really is no other way I see.