6 ms·

or more simply, put a tax on empty units so there is pressure to rent.

hyuuu 4y ago
in order not to get rented, they will list high rent prices + 750+ credit scores. Easy eviction makes the market more fluid, thus higher competitions because the supply will be more readily available. What I just said does not really matter because politicians will put forth failed policies like rent control or empty unit tax that does not help with the supply at all, BUT, it does help them to get votes at the expense of long term damage to the housing market. Singapore solved housing, New Zealand solved housing, both times by increasing supply.
- jonfw 4y ago
  Nobody will try to avoid finding renters if it costs money to not have a renter
  - dh2022 4y ago
    I happen to own a couple rental properties. I can assure you that I avoided renters with low credit score and high rent / income ratio. Even if it took longer (months longer) to find a renter, is better to wait for someone solid than rent to someone who may trash the place, be late on rent, etc....
    - runnerup 4y ago
      > I happen to own a couple rental properties. I can assure you that... And I can assure you that you weren't directly responding to GP's proposal. If your property tax was 1.5% per month for every month that the unit was unoccupied, you'd find renters ASAP. There's no way you'd leave a $500,000 property unoccupied for a year if it cost you $100,000 in taxes to do so. Yes, we also need default YIMBY laws to make it easier to add new high-quality units. But in addition, we can immediately free up unutilized units with an empty-unit tax of 1.5% per month.
      - Atheros 4y ago
        It would be vastly cheaper for us as a society to not do the vacancy tax at all and just build an extra X units where X equals the number of vacant units. Society would get to continue collecting the millions of dollars in annual property taxes on the vacant units without providing any city services because no one lives there. It's free money. Separately, the enforcement cost of your idea makes it untenable. The law would have so many loopholes, it would be and stay toothless for decades. Even if we assume for the sake of argument that it actually worked and the rate of empty units went to nearly 0%, it would warp the real estate market so much it would eliminate all benefit: because there would be fewer people looking for apartments (because they are housed in the previous vacant units), fewer new buildings get built. After a decade prices would be back to where they are now except that now it would be more of a headache to find an apartment because the vacancy rate is 0%.
        runnerup 4y ago
        I'd be fine also just doing a flat increase of property tax (preferably something slightly more towards a land-value tax). There should be more pressure to make sure real estate assets are being re-invested into the economy rather than hoarded for passive deflationary gains. As mentioned, we also need to make it easier to build lots of new high-quality units.
        ashwagary 4y ago
        >It would be vastly cheaper for us as a society to not do the vacancy tax at all and just build Could be a good idea to use the vacancy tax to build.
        Atheros 4y ago
        Advocates of the vacancy tax imply that their goal is to eliminate vacancies thus freeing up more housing. If our goal is, instead, to maximize tax revenue in order to build permanently-affordable housing then that is a much different (and better!) conversation. That's a long-term good. But if that's our conversation then everybody needs to be prepared for the possible answer to be that the vacancy tax should be negative.
    - jonfw 4y ago
      But if it cost you a bunch of money not to have a renter, you might lower your standards or your prices, making housing more available. The whole point is to screw you (not you personally, but you as in landlords) into making your property available
      - dagw 4y ago
        you might lower your standards or your prices Or you will raise your prices to compensate for the extra costs and risks of being stuck with empty units.
        deleted 4y ago
        [deleted]
- CogitoCogito 4y ago
  > because politicians will put forth failed policies like rent control or empty unit tax that does not help with the supply at all Why wouldn't an empty unit tax help supply? Holding a unit empty would be more costly. It would provide a direct financial incentive to rent out the unit. By what reasoning would it not increase the supply of rental units on the market? Now I could understand if you were to argue that other policies are better, but that's another argument all together. Also laws could be changes to make it easier to evict tenants while simultaneously putting empty unit taxes into place. They are independent policies.
  - dagw 4y ago
    Why wouldn't an empty unit tax help supply? Supply of what though? Housing units or rental units. Make owning rental units too expensive and risky and people will convert those units from rental to owned by simply selling them. Now while the total supply of housing hasn't changed (and might even have increased on the margin), there will be less supply of rental units on the market.
    - kjreact 4y ago
      > Now while the total supply of housing hasn't changed (and might even have increased on the margin), there will be less supply of rental units on the market. But then you’d also have less renters in your scenario because a renter became an owner. Less renters would mean a decrease in demand for rentals. The only situation which hurts buyers and renters is when the unit is left empty to artificially decrease supply.
    - Rury 4y ago
      Why not both?
- tuatoru 4y ago
  New Zealand solved housing in the 1940s and 1950s. In the 21st century, New Zealand is notable for having extremely high house prices and rents relative to mediam income. On charts produced by the Economist magazine, NZ is regularly top or second for "most expensive housing". It's not uncommon for over 50% of a NZ household's net income to be going on rent. People are renting tin sheds to live in because there's nothing else.[1] New Zealand needs to solve housing. 1. Having said that, the average NZ house built in the 1960s through the 1990s is worse than most tin sheds to live in. Colder and moldier.
lotsofpulp 4y ago
Should be an extremely high property tax (or land value tax) with a sufficient credit for residents. Make use of it, or make it untenable to not sell it. But also make it easier and quicker to evict for nonpayment.
perryizgr8 4y ago
How would you enforce that with any effectiveness? If I'm a landlord I'll just get one of my distant relatives to transfer me $100 every month and show the unit as "rented". They have rented it, but just happen to spend a lot of time away due to "reasons".
- klyrs 4y ago
  The Vancouver area had a problem with developers building condo buildings, with the majority of units being empty. That's gonna need a lot of distant relatives being willing to engage in tax fraud.
- lotsofpulp 4y ago
  Require all residents to submit a federal and state tax return showing their resident addresses. The city can simply outsource this verification to the state, since the state is already collecting federal income tax returns. I doubt many distant relatives are willing to commit federal and state felonies by fraudulently claiming they live somewhere they do not so that their relative can profit from holding onto a property. Additionally, mobile networks have logs of your real time location just a subpoena away, so good luck fighting it.
- smileysteve 4y ago
  Some people can risk performing tax fraud for a while; others cannot. This tax fraud scheme would open you to both state and federal audits.
thinking4real 4y ago
Taxes should not be a hand break for politicians to control civilians This is tyrannical thinking and I see it a lot…
- Jcowell 4y ago
  Taxes have always been means to control civilian behavior. I.e Sugar Tax
Atheros 4y ago
There already is. Some cities, including the expensive cities in the U.S., make bank collecting property taxes on vacant units- units for which the city provides no schools, transit, trash collection, healthcare, water, or any other services because no one lives there. It's free money! The rational course of action is to not only not levy a tax on empty units, but to encourage as many empty units as possible! Collect property taxes without the overhead of futilely trying to figure out which are vacant. Then let the free market build housing to make up for it. This is what New York City is doing. Remember that the housing market is a market. If you magically appear 20K units out of nowhere, prices will go down for a while until 20K units don't get built that would otherwise get built and prices then end up right where they would have if you didn't magically appear those units.
cryptonector 4y ago
You have to think dynamically and from the landlords' p.o.v. If you do you'll realize that this likely wouldn't work. The comments below explain some of it.

in order not to get rented, they will list high rent prices + 750+ credit scores. Easy eviction makes the market more fluid, thus higher competitions because the supply will be more readily available. What I just said does not really matter because politicians will put forth failed policies like rent control or empty unit tax that does not help with the supply at all, BUT, it does help them to get votes at the expense of long term damage to the housing market. Singapore solved housing, New Zealand solved housing, both times by increasing supply.

jonfw 4y ago
Nobody will try to avoid finding renters if it costs money to not have a renter
- dh2022 4y ago
  I happen to own a couple rental properties. I can assure you that I avoided renters with low credit score and high rent / income ratio. Even if it took longer (months longer) to find a renter, is better to wait for someone solid than rent to someone who may trash the place, be late on rent, etc....
  - runnerup 4y ago
    > I happen to own a couple rental properties. I can assure you that... And I can assure you that you weren't directly responding to GP's proposal. If your property tax was 1.5% per month for every month that the unit was unoccupied, you'd find renters ASAP. There's no way you'd leave a $500,000 property unoccupied for a year if it cost you $100,000 in taxes to do so. Yes, we also need default YIMBY laws to make it easier to add new high-quality units. But in addition, we can immediately free up unutilized units with an empty-unit tax of 1.5% per month.
    - Atheros 4y ago
      It would be vastly cheaper for us as a society to not do the vacancy tax at all and just build an extra X units where X equals the number of vacant units. Society would get to continue collecting the millions of dollars in annual property taxes on the vacant units without providing any city services because no one lives there. It's free money. Separately, the enforcement cost of your idea makes it untenable. The law would have so many loopholes, it would be and stay toothless for decades. Even if we assume for the sake of argument that it actually worked and the rate of empty units went to nearly 0%, it would warp the real estate market so much it would eliminate all benefit: because there would be fewer people looking for apartments (because they are housed in the previous vacant units), fewer new buildings get built. After a decade prices would be back to where they are now except that now it would be more of a headache to find an apartment because the vacancy rate is 0%.
      - runnerup 4y ago
        I'd be fine also just doing a flat increase of property tax (preferably something slightly more towards a land-value tax). There should be more pressure to make sure real estate assets are being re-invested into the economy rather than hoarded for passive deflationary gains. As mentioned, we also need to make it easier to build lots of new high-quality units.
      - ashwagary 4y ago
        >It would be vastly cheaper for us as a society to not do the vacancy tax at all and just build Could be a good idea to use the vacancy tax to build.
        Atheros 4y ago
        Advocates of the vacancy tax imply that their goal is to eliminate vacancies thus freeing up more housing. If our goal is, instead, to maximize tax revenue in order to build permanently-affordable housing then that is a much different (and better!) conversation. That's a long-term good. But if that's our conversation then everybody needs to be prepared for the possible answer to be that the vacancy tax should be negative.
  - jonfw 4y ago
    But if it cost you a bunch of money not to have a renter, you might lower your standards or your prices, making housing more available. The whole point is to screw you (not you personally, but you as in landlords) into making your property available
    - dagw 4y ago
      you might lower your standards or your prices Or you will raise your prices to compensate for the extra costs and risks of being stuck with empty units.
      - deleted 4y ago
        [deleted]
CogitoCogito 4y ago
> because politicians will put forth failed policies like rent control or empty unit tax that does not help with the supply at all Why wouldn't an empty unit tax help supply? Holding a unit empty would be more costly. It would provide a direct financial incentive to rent out the unit. By what reasoning would it not increase the supply of rental units on the market? Now I could understand if you were to argue that other policies are better, but that's another argument all together. Also laws could be changes to make it easier to evict tenants while simultaneously putting empty unit taxes into place. They are independent policies.
- dagw 4y ago
  Why wouldn't an empty unit tax help supply? Supply of what though? Housing units or rental units. Make owning rental units too expensive and risky and people will convert those units from rental to owned by simply selling them. Now while the total supply of housing hasn't changed (and might even have increased on the margin), there will be less supply of rental units on the market.
  - kjreact 4y ago
    > Now while the total supply of housing hasn't changed (and might even have increased on the margin), there will be less supply of rental units on the market. But then you’d also have less renters in your scenario because a renter became an owner. Less renters would mean a decrease in demand for rentals. The only situation which hurts buyers and renters is when the unit is left empty to artificially decrease supply.
  - Rury 4y ago
    Why not both?
tuatoru 4y ago
New Zealand solved housing in the 1940s and 1950s. In the 21st century, New Zealand is notable for having extremely high house prices and rents relative to mediam income. On charts produced by the Economist magazine, NZ is regularly top or second for "most expensive housing". It's not uncommon for over 50% of a NZ household's net income to be going on rent. People are renting tin sheds to live in because there's nothing else.[1] New Zealand needs to solve housing. 1. Having said that, the average NZ house built in the 1960s through the 1990s is worse than most tin sheds to live in. Colder and moldier.

lotsofpulp 4y ago

Should be an extremely high property tax (or land value tax) with a sufficient credit for residents. Make use of it, or make it untenable to not sell it. But also make it easier and quicker to evict for nonpayment.

perryizgr8 4y ago

How would you enforce that with any effectiveness? If I'm a landlord I'll just get one of my distant relatives to transfer me $100 every month and show the unit as "rented". They have rented it, but just happen to spend a lot of time away due to "reasons".

klyrs 4y ago
The Vancouver area had a problem with developers building condo buildings, with the majority of units being empty. That's gonna need a lot of distant relatives being willing to engage in tax fraud.
lotsofpulp 4y ago
Require all residents to submit a federal and state tax return showing their resident addresses. The city can simply outsource this verification to the state, since the state is already collecting federal income tax returns. I doubt many distant relatives are willing to commit federal and state felonies by fraudulently claiming they live somewhere they do not so that their relative can profit from holding onto a property. Additionally, mobile networks have logs of your real time location just a subpoena away, so good luck fighting it.
smileysteve 4y ago
Some people can risk performing tax fraud for a while; others cannot. This tax fraud scheme would open you to both state and federal audits.

thinking4real 4y ago

Taxes should not be a hand break for politicians to control civilians This is tyrannical thinking and I see it a lot…

Jcowell 4y ago
Taxes have always been means to control civilian behavior. I.e Sugar Tax

Atheros 4y ago

There already is. Some cities, including the expensive cities in the U.S., make bank collecting property taxes on vacant units- units for which the city provides no schools, transit, trash collection, healthcare, water, or any other services because no one lives there. It's free money! The rational course of action is to not only not levy a tax on empty units, but to encourage as many empty units as possible! Collect property taxes without the overhead of futilely trying to figure out which are vacant. Then let the free market build housing to make up for it. This is what New York City is doing. Remember that the housing market is a market. If you magically appear 20K units out of nowhere, prices will go down for a while until 20K units don't get built that would otherwise get built and prices then end up right where they would have if you didn't magically appear those units.

cryptonector 4y ago

You have to think dynamically and from the landlords' p.o.v. If you do you'll realize that this likely wouldn't work. The comments below explain some of it.