4 ms·

If the issue is the supply of rental (i.e. investment) properties is too low, do we want to encourage or discourage investment homes?

TheLoafOfBread 3y ago
progressive property tax which will increase with amount of owned properties.
- balderdash 3y ago
  Outline the impact of that on supply and demand?
- badcppdev 3y ago
  Quantity and value of properties. Which also means a wealth tax. To be clear I'm 100% in favour of this. The current economic trickle-up system is starting to cause serious problems. Large sections of populations everywhere are increasingly shut out of the capitalist system because they do not have ANY access to capital.
  - candiodari 3y ago
    But does it matter? The way housing problems were always fixed was very simple and without any kind of tax: with the government building social housing, allocated according to social principles (you pay the same, but the size of the apartment is determined by the number of kids you have). A LOT of non-luxury housing. This has nearly stopped. These buildings were famously bad. First, they tended to be unfair and violate building codes, they were government projects (ie. cost a lot more than a luxury housing development despite being much worse), and since houses got allocated by the government to vulnerable groups, they tended to have safety issues in the first few years they existed. But they fixed housing. A decade or so after they were built and things became somewhat stable around them. The problem with tax, and any kind of economic system is very simple. Capitalism and communism, and the more creative options like mercantilism or militarism, we can argue about them for a long time, but fundamentally they divide up existing properties. Nothing more. We can use these systems to choose WHO is homeless, but they cannot lower the number of homeless.
    - badcppdev 3y ago
      Sorry I don't understand, "they divide up existing properties". Also many Western cities have very high numbers of homes that are vacant. Seems like a tax on that behaviour would be hard to argue about?
      - candiodari 3y ago
        I thought the vacant homes were in the "thousands", let's say 10k, for a city like New York. Most of these are uninhabitable. I mean, it's sad and public and horrible, but it certainly isn't going to solve homelessness. They're a drop on a hot plate.
    - tharmas 3y ago
      I agree. Its not a problem free solution but its the only one that seems to be effective at reducing homelessness and increasing affordability. Post WW2 in the UK the gov't built a lot of social housing that was successful. Sure there were some failures too (eg tower blocks), but I believe those were built much later.
- fallingknife 3y ago
  Great. So now I will have to pay higher rent to cover this ridiculous tax. "Then you can buy a house" you will say. But I don't want to. I just want to rent, and I don't want to be forced into buying just because other people are consumed by envy whenever they see a landlord making money.
- cableshaft 3y ago
  People usually own multiple properties (outside of main home/vacation home, at least) to rent them to others. So they will just pass that cost to their renters, and make rent more expensive. Although I guess there could be some number of properties where that becomes untenable as well.
  - theonlybutlet 3y ago
    It encourages supply and liquidity in the market. Individuals will see an opportunity to undercut the large investors if they're hoarding property, so will build new property if they can't get their hands on existing properties. And if it is no longer feasible they're likely to sell rather than hoard for property appreciation.
  - ryandrake 3y ago
    If they could simply "pass that cost to their renters" why wouldn't they just raise rents to that level now, absent any tax increase? The point of this progressively increasing tax would be to raise the landlord's costs to the point where the market actually cannot bear a rent increase--which would disincentivize using the property as an investment.
    - traverseda 3y ago
      Presumably it's a coordination problem. If everyone raises rent you can too. If your rent is abnormally high you'll either have a hard time finding tenants or get abnormal tenants.
      - ryandrake 3y ago
        But in this scheme, not every landlord will have the increased tax and thus need to raise rent--only the ones with many properties. So that behavior becomes disincentivized.
dee-bee 3y ago
Who wants to rent? I imagine most would opt to own instead. Rent is certainly far higher than a mortgage would be, which makes little sense if you're trying to encourage ownership (as often is the story about the american dream)
- rhaway84773 3y ago
  Rent is only higher in the US because the U.S. govt greatly subsidized ownership. As an example, 30 year fixed rate mortgages are only a thing in the US because of govt guarantees.
- fallingknife 3y ago
  Anybody who doesn't want to: - put up a ton of capital - take housing price risk - enter into a long term commitment - deal with maintenance and repairs - deal with selling my investment every time I move And that includes me. I want to rent. I want the landlord to take care of all that crap for me. And I'm tired of all these people complaining about it.
  - fatfingerd 3y ago
    Yes, a nonprofit group running/developing a housing area and renting to its members is much nicer than having to own at least a condo and then dealing with a bunch of bank/lawyer/realtor nonsense every time you want to move.
    - fallingknife 3y ago
      I don't want to be a member of a non profit housing group. Sounds like an HOA but made worse by the sanctimony and lack of incentives of people who work for non profits. I just want to hand over my money to a landlord and not think about it. My only considerations are what I pay and what I get in return. How much the landlord is making isn't at all relevant to me.
      - fatfingerd 3y ago
theonlybutlet 3y ago
I think in the case of property, multiple supply/demand equilibriums are possible. Land is a finite resource and rents way exceed mortgage repayments. I think there is a way to encourage the supply of rental in a scenario where they hold less quantities of land.
- etrautmann 3y ago
  Is that true in us cities? Mortgage payments seem to be much higher than rents on equivalent places right now.
  - SauciestGNU 3y ago
    Small city resident checking in here, 1br apartments are going for $1500/mo on average here, and we're considered an extremely affordable place to live. The average person I know carrying a mortgage has a payment below that for much more living space. What I would say we're missing is condominiums in the city center. Lots of apartments, fewer places to own in the inventory of downtown housing.
    - etrautmann 3y ago
      Yes but those people got mortgages before the last year. With rates at 6-7%, the payments are going to be a lot higher or you get a lot less.

TheLoafOfBread 3y ago

progressive property tax which will increase with amount of owned properties.

balderdash 3y ago
Outline the impact of that on supply and demand?
badcppdev 3y ago
Quantity and value of properties. Which also means a wealth tax. To be clear I'm 100% in favour of this. The current economic trickle-up system is starting to cause serious problems. Large sections of populations everywhere are increasingly shut out of the capitalist system because they do not have ANY access to capital.
- candiodari 3y ago
  But does it matter? The way housing problems were always fixed was very simple and without any kind of tax: with the government building social housing, allocated according to social principles (you pay the same, but the size of the apartment is determined by the number of kids you have). A LOT of non-luxury housing. This has nearly stopped. These buildings were famously bad. First, they tended to be unfair and violate building codes, they were government projects (ie. cost a lot more than a luxury housing development despite being much worse), and since houses got allocated by the government to vulnerable groups, they tended to have safety issues in the first few years they existed. But they fixed housing. A decade or so after they were built and things became somewhat stable around them. The problem with tax, and any kind of economic system is very simple. Capitalism and communism, and the more creative options like mercantilism or militarism, we can argue about them for a long time, but fundamentally they divide up existing properties. Nothing more. We can use these systems to choose WHO is homeless, but they cannot lower the number of homeless.
  - badcppdev 3y ago
    Sorry I don't understand, "they divide up existing properties". Also many Western cities have very high numbers of homes that are vacant. Seems like a tax on that behaviour would be hard to argue about?
    - candiodari 3y ago
      I thought the vacant homes were in the "thousands", let's say 10k, for a city like New York. Most of these are uninhabitable. I mean, it's sad and public and horrible, but it certainly isn't going to solve homelessness. They're a drop on a hot plate.
  - tharmas 3y ago
    I agree. Its not a problem free solution but its the only one that seems to be effective at reducing homelessness and increasing affordability. Post WW2 in the UK the gov't built a lot of social housing that was successful. Sure there were some failures too (eg tower blocks), but I believe those were built much later.
fallingknife 3y ago
Great. So now I will have to pay higher rent to cover this ridiculous tax. "Then you can buy a house" you will say. But I don't want to. I just want to rent, and I don't want to be forced into buying just because other people are consumed by envy whenever they see a landlord making money.
cableshaft 3y ago
People usually own multiple properties (outside of main home/vacation home, at least) to rent them to others. So they will just pass that cost to their renters, and make rent more expensive. Although I guess there could be some number of properties where that becomes untenable as well.
- theonlybutlet 3y ago
  It encourages supply and liquidity in the market. Individuals will see an opportunity to undercut the large investors if they're hoarding property, so will build new property if they can't get their hands on existing properties. And if it is no longer feasible they're likely to sell rather than hoard for property appreciation.
- ryandrake 3y ago
  If they could simply "pass that cost to their renters" why wouldn't they just raise rents to that level now, absent any tax increase? The point of this progressively increasing tax would be to raise the landlord's costs to the point where the market actually cannot bear a rent increase--which would disincentivize using the property as an investment.
  - traverseda 3y ago
    Presumably it's a coordination problem. If everyone raises rent you can too. If your rent is abnormally high you'll either have a hard time finding tenants or get abnormal tenants.
    - ryandrake 3y ago
      But in this scheme, not every landlord will have the increased tax and thus need to raise rent--only the ones with many properties. So that behavior becomes disincentivized.

dee-bee 3y ago

Who wants to rent? I imagine most would opt to own instead. Rent is certainly far higher than a mortgage would be, which makes little sense if you're trying to encourage ownership (as often is the story about the american dream)

rhaway84773 3y ago
Rent is only higher in the US because the U.S. govt greatly subsidized ownership. As an example, 30 year fixed rate mortgages are only a thing in the US because of govt guarantees.
fallingknife 3y ago
Anybody who doesn't want to: - put up a ton of capital - take housing price risk - enter into a long term commitment - deal with maintenance and repairs - deal with selling my investment every time I move And that includes me. I want to rent. I want the landlord to take care of all that crap for me. And I'm tired of all these people complaining about it.
- fatfingerd 3y ago
  Yes, a nonprofit group running/developing a housing area and renting to its members is much nicer than having to own at least a condo and then dealing with a bunch of bank/lawyer/realtor nonsense every time you want to move.
  - fallingknife 3y ago
    I don't want to be a member of a non profit housing group. Sounds like an HOA but made worse by the sanctimony and lack of incentives of people who work for non profits. I just want to hand over my money to a landlord and not think about it. My only considerations are what I pay and what I get in return. How much the landlord is making isn't at all relevant to me.
    - fatfingerd 3y ago

theonlybutlet 3y ago

I think in the case of property, multiple supply/demand equilibriums are possible. Land is a finite resource and rents way exceed mortgage repayments. I think there is a way to encourage the supply of rental in a scenario where they hold less quantities of land.

etrautmann 3y ago
Is that true in us cities? Mortgage payments seem to be much higher than rents on equivalent places right now.
- SauciestGNU 3y ago
  Small city resident checking in here, 1br apartments are going for $1500/mo on average here, and we're considered an extremely affordable place to live. The average person I know carrying a mortgage has a payment below that for much more living space. What I would say we're missing is condominiums in the city center. Lots of apartments, fewer places to own in the inventory of downtown housing.
  - etrautmann 3y ago
    Yes but those people got mortgages before the last year. With rates at 6-7%, the payments are going to be a lot higher or you get a lot less.