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The simple solution is if you purchase a property and are not living in it - i.e. its an investment property - you get taxed at a substantially higher rate. Bot
by vparikh 4y ago
The simple solution is if you purchase a property and are not living in it - i.e. its an investment property - you get taxed at a substantially higher rate. Both in property taxes and taxes on the profit made.
- SketchySeaBeast 4y agoThe rebuttal you're probably going to hear about this is how this will inordinately punish the private citizen buying a second home as an investment property. We do ultimately need some amount of rentals and those need to be affordable - if the investment property has the hell taxed out of that's going straight to the renter. I say this in an effort to try to point out it's a complicated issue, I in no way support the current large investor predatory housing market.
- itake 4y agoMaybe we should just end the home rental market. You either rent an apartment or buy a house.
- zeroonetwothree 4y agoThat seems terrible for consumers
- itake 4y agoWhy?
- vlunkr 4y agoWhat if there are no apartments in your area? Or you have a large family but can’t get a mortgage at the moment? There are plenty of legitimate reasons to rent a home.
- acuozzo 4y agoIf it were ended, then what would happen to homeowners who need to move now, but can't sell their home due to market conditions?
- itake 4y agoThey still face that decision in the current system. Even if you tried to keep the property, you are still losing time and money. Some people are also just unlucky on market timing.
- harshalizee 4y agoThat would be disastrous for families with multiple kids. They may not be able to afford to buy, but able to rent. Forcing them all into an apartment can be chaotic.
- itake 4y agoAt least in Seattle, renting an apartment is cheaper than owning a home.
- kahrl 4y agoNobody said "the hell" taxed out of anything. Conversation is completely shut down by these dumb Devil's advocate takes before anyone talks details such as a graduated tax rate.
- bcrosby95 4y ago>> substantially higher rate Is a nice way of saying "tax the hell out of it".
- SketchySeaBeast 4y agoOk, so my choice of wording is poor, but I'm not trying to do a devil's advocate take, I'm trying to talk about the breadth of the issue. What would you like to see with this? Do you think people should own second rental properties? If so, what does "a substantially higher rate" mean to you that stops investors with deep pockets from investing but not regular people? If people shouldn't own a second property, then why not flagrantly tax them? But then where do renters go?
- larsiusprime 4y ago> If the investment property has the hell taxed out of that's going straight to the renter Not if you exempt the value of the building from taxation and focus the tax exclusively on the value of the underlying land. This has been empirically demonstrated in multiple studies: http://gameofrent.com/content/can-lvt-be-passed-on-to-tenants http://gameofrent.com/content/can-lvt-be-passed-on-to-tenant...
- affinepplan 4y ago> how this will inordinately punish the private citizen buying a second home as an investment property. Good. Properties should not be investments.
- SketchySeaBeast 4y agoAs I've said in other places - rental properties will always be required. Not everyone is in a position where they can or should own their own home.
- hooverd 4y agoPublic developer to the rescue.
- forgotusername6 4y agoThe government should provide housing in those cases.
- SketchySeaBeast 4y agoThe government takes over the entirety of the rental market? There's over 100 million people in the United States who rent.
- forgotusername6 4y agoThe government should step in when the rental market is failing to deliver for the people i.e. when rents become unaffordable due to lack of supply. They can step in with zoning law changes but they can also step in with direct competition.
- njarboe 4y agoMaybe works in some countries. Government housing in the US is awful.
- dixie_land 4y ago
- nicoburns 4y ago> The rebuttal you're probably going to hear about this is how this will inordinately punish the private citizen buying a second home as an investment property. Why would it be desirable to encourage private citizens to use property as an investment? I mean, they'd perhaps need to be a one-time easing to ensure that people who have already planned their retirement around such a scheme aren't completely fucked over. But long term it seems to me that there's no downside to this being punished.
- SketchySeaBeast 4y agoUltimately some people do need a place to rent to live. I saw someone else suggest that rentals are only allowed in apartments, maybe that solves this, but rentals are a vital part of the housing equation.
- nicoburns 4y agoRight, but people don't need to be making money out of that. I think you could set the tax rates so that people basically break even (make a small profit) from renting a house out, and they actually lose money if they hold on to a house they're not renting out (with some carefully worded time-limited exceptions for houses under renovation). That would drive down house prices sharpish! You could also allow the state to step in as owners of rental housing where private landlords aren't making enough rental houses available. And if the state actually built houses for rental you likely wouldn't need as harsh taxation because the rental prices would drop purely through the increased supply.
- SketchySeaBeast 4y agoWhat stops the landlord from raising the rent? All the landlords will be under the same pressure, so rent should rise universally.
- jfghi 4y agoThey do that anyways.
- flavius29663 4y ago> punish the private citizen buying a second home as an investment property Second property should be taxed a little bit more. 3rd much more, 4th much much more etc. > has the hell taxed out of that's going straight to the renter That can be said about anything that has taxes on it: it goes back to punish the final consumer, but in the end it's worth trying to correct the market, be it cigarettes or homes for investment.
- SketchySeaBeast 4y agoI suppose the difference there is that by and large people who find the new tax too onerous can reduce their cigarette consumption or even stop smoking altogether, but people can't just stop renting their home.
- flavius29663 4y agowell yes, but you're still allowing cheap second house, but not third. This means more middle class people can buy an investment home, but they will have to stop there, discouraging landlords with a huge stock of houses. You don't want to discourage investment in houses, just oligopolies/monopolies on the housing stock, and also unoccupied houses.
- UncleMeat 4y agoWhy is this bad? Private citizens buying up property to extract rents is also a problem.
- xwdv 4y agoThat’s not a solution. If you do this then rent will just increase to make up for the tax increases. It’s a big Fuck You to the tenants. Taxes ALWAYS pass on to the consumer.
- ClumsyPilot 4y agoSo profits can never drop? Rental Yield is twice higher in London than in Prague.
- xwdv 4y agoRent profit could drop and still be at Fuck You prices for the tenants.
- likeabbas 4y agoThe best solution would have been to built more euro-style cities that are walkable and with much more dense, but that's almost impossible for most of the US now.
- MonkeyMalarky 4y agoThe recent manufactured outrage and conspiracy theories over 15-minute cities is astounding though. From where did it come? Why? I used to live in a 15-minute city. It was awesome! People from all over the world gush at how great it is when they visit. And it's supposed to be a bad thing? Wow.
- nicbou 4y agoIf you're used to be part of the recreationally remote, the idea of not having ample space to yourself feels weird. Some people are used to having a backyard, a garage, and lots of space to spare, however useless it is to them, and unsustainable in general. The benefits of living in the city are a lot less obvious. Some people perceive it as a cramped space where you're forced to endure the company of strangers. If their lifestyle wasn't subsidized by city dwellers, and causing all sorts of negative externalities, I'd say "to each their own".
- remarkEon 4y agoI must be out of the loop. What is a "15-minutes city"? What is the outrage? Edit: was an easy google. [1] >While many cities have implemented policies along the 15-minute city concept, disagreement remains over whether the model benefits residents. Critics point out that the creation of dense, walkable cores like a 15-minute neighborhood often leads to gentrification and displacement. Further, price increases, like those associated with gentrification, could be harmful to marginalized groups like people with disabilities, forcing move-outs.[53] Similarly, as the concept's origin is largely European, critics have argued that implementing the model could be colonialist and perpetuate harm to marginalized communities. Yeah, the "outrage" is a gaslighting exercise. [1] https://en.wikipedia.org/wiki/15-minute_city https://en.wikipedia.org/wiki/15-minute_city
- zeroonetwothree 4y agoThat will be terrible for the rental market. BTW as a general rule any simple solution to a complex problem is always wrong.
- llimos 4y agoIf cities are deciding on these taxes themselves, not central government, they can adjust it dynamically until the need for rentals and the need for affordable homes balance out. They could even do it per neighbourhood. If it never balances out - that is a sign that there are simply not enough houses, and they need to start building.
- crazygringo 4y agoHow do you define "balancing out"? There's no such thing. As long as taxes are the same between the two, the market will balance them. Building is a separate issue.
- llimos 4y agoIt's not so complicated to judge whether rents are too high or house prices are too high or both. It might be somewhat subjective, but that's government's job - to make those calls.
- crazygringo 4y agoBut the market adjusts automatically so why do you even need a government to make a call? That's like saying the government should be involved in making a call as to whether apples and oranges are too expensive relative to each other in the supermarket.
- llimos 4y agoBecause housing isn't a free market. There's a finite supply of land, and what you can do with it is even more tightly controlled.
- credit_guy 4y agoThere's a simpler solution: let people build. Relax zoning restrictions. If you don't constrain the housing supply, real estate will cease being a good investment. Houses should depreciate in value in time, just like cars. When this happens investors will not elbow out anyone, because there will be no investors, just like there are no investors in cars.
- zeroonetwothree 4y agoLand will appreciate because, as they say, they don’t make more of it. As long as population keeps growing, demand for land will increase.
- ddulaney 4y agoYes, for sure. But if you can easily build 20 or 10 or even just 2 stories on top of it, land value decouples from housing value (not all the way, but substantially). And for most people, housing value is what really matters; land value is secondary.
- larsiusprime 4y agoLand value is actually enormously important in the economy -- it's 1/3 of the value of all real assets and probably represents a similar amount of bank loans (real estate itself is 2/3 or real assets and about 2/3 of bank loans). http://gameofrent.com/content/is-land-a-big-deal#is-land-a-really-big-deal http://gameofrent.com/content/is-land-a-big-deal#is-land-a-r... Relaxing zoning laws and allowing for significantly more supply IS very important -- but it's not sufficient by itself. (For the record, neither are Land Value Taxes sufficient). The true solution is to enact both: https://progressandpoverty.substack.com/p/land-and-the-liberty-to-build-on https://progressandpoverty.substack.com/p/land-and-the-liber... If you want to be able to consistently decouple housing value from land value, you'll need both of these policies.
- credit_guy 4y ago> Land value is actually enormously important in the economy -- it's 1/3 of the value of all real assets and probably represents a similar amount of bank loans (real estate itself is 2/3 or real assets and about 2/3 of bank loans). That's just consequences of the artificial scarcity of real estate. Real estate should be a much smaller fraction of the economy, and land value too. Once real estate stops being an investment, mortgage debt will be just like car loans, an important segment of the credit markets, but by no means the gargantuan size that it is today. And once land value drops from 1/3 to 1/10 of the real estate assets, then the difference between Georgism, Marxism and Neoclassicism will become academic (as it should be).
- mywittyname 4y agoDoes this help provide more housing? Or is it merely a justification to charge higher rents? It seems better for everyone if these houses could be torn down and replaced with multi-family units (apartments, row homes). These homes are good investments because the area is in need of higher density and the land values will appreciate commensurate with that need. If property taxes are ratcheted up, it might make sense to just demolish the building and hold the land for its appreciation alone. Thus, further reducing housing stock and driving up rents.
- kasey_junk 4y agoMost jurisdictions already do this don’t they?
- onlyrealcuzzo 4y agoIf taxes are substantially higher - that will get passed down to the renter. Should renting be a privilege only for the rich? What happens when you're <30 and moving around for school & to get your first few years of experience? What happens when your credit is awful and no one will lend you money for a house even if housing is 3% cheaper because there's less investors elbowing you out?
- bedast 4y agoThis is just justification to charge higher rent.
- cashsterling 4y agoI'll go a step further and argue that residential zoned property should be owned by residents, i.e., actual people that live on that property. By allowing the wealthy, and especially investment firms, to buy residential property as an investment... we are hastening a return to feudalism. Also real estate investment is the basest, dumbest form of investment. It takes little to no intelligence to make money in residential real estate. I personally refuse to touch it on principle. There are other countries who have laws that corporations cannot own residential property and legal residents are only allowed to own one residential property at a time. I do think there should be some relaxation of this law in the US so that folks can own a city property and a vacation cabin, or something, but I like the notion.
- jmplng 4y agoWhy are you trying to make renting so unaffordable? Dislike renters in your neighborhood? (To be clear I am not saying this is right or wrong, I’m asking. I have used renting to increase my flexibility and to live places I couldn’t afford to or wouldn’t want to own for fun / access to jobs. I can see not wanting someone that doesn’t intend to stick around long term in your neighborhood I suppose).
- readthenotes1 4y agoA similarly simple solution would be to ease the regulatory nightmare that has made low-end houses unprofitable to build, and all new housing much more expensive. Not too many days ago there is an article showing that productivity in home construction has been almost nil for decades because the government inefficiency overpowers any construction gain.