5 ms·

How does taxing existing housing magically create new houses to solve the housing crisis?

zjp 3y ago
Long-term renting is just not recognized as legitimate housing in America. We are all temporarily embarrassed homeowners.
- prepend 3y ago
  It is recognized. But I think the goal is that 90% of people should be homeowners and getting people there. For the vast majority of people, owning a home is superior to renting. So I think most home policy is in getting people able to purchase, own, and sustain their own home. Certainly, some people’s situation makes rent better, but it’s much smaller than people who should buy. But it’s too expensive to buy for too many people. I don’t think someone should be embarrassed, but it’s not like the goal here is to get more people renting and fewer owning.
  - mistrial9 3y ago
    > the goal is that 90% of people should be homeowners yeah right - info welcome from those that read giant books on the 2008 credit events.. one thread in that is that it was a clumsy and heavy-handed, politics-origin set of decisions to make "sub-prime" mortgage rates available widely, in order to move the homeownership rates in the general population from sixty-something percent to the glory-lands of ninety-something percent. Well, in fact lending policy at scale did not do that, and as a side-effect the entire US and possible dollar-based credit system cracked at the base. The strongest economy in the world, actually almost did choke on credit. Meanwhile, a recent study echoed here on YNews said that "A million homes are being kept empty while housing costs soar" WSJ . How does one reconcile this?
    - prepend 3y ago
      Sell the million homes to people who need homes? Seems like a simple option.
tannedNerd 3y ago
The key difference is that it’s not someone’s primary residence. Even I as a fairly libertarian person think it’s not a terrible policy to keep someone’s primary residence at a cheap tax level but increase the tax levels to prevent homes sitting empty for 50 out of the 52 weeks a year. Land is a finite resource. If we make the it more expensive to keep that house empty maybe it will be rented out to someone in which case you just increased the housing supply without having to build anything.
- seanmcdirmid 3y ago
  If you go that route, people will game it by dividing it among family. Instead, an unoccupied housing tax might make more sense, which is what they do in Vancouver. A real land/property tax that forces productive use of land is also needed, but repealing prop 13 is probably never going to happen.
  - ImPostingOnHN 3y ago
    > If you go that route, people will game it by dividing it among family That's okay, because it is solving the problem Either, A) the family member had another primary residence that they're vacating to make this their primary residence, thus freeing up the old property for someone to buy, or B) the family member didn't already have a home, and the number of people with a home increases by 1, which is what we're trying to do in the first place
    - seanmcdirmid 3y ago
      Most families have at least two people, so husband house and wife house is completely possible. You don't say anything about residing in it. Anyways, this is a well studied problem in China where they tried this, and almost everyone successfully gamed the system that it was a no-op.
      - ImPostingOnHN 3y ago
        families would not have one of the spouses or one of their young children claim a separate home as their primary residence, because they would have to actually live there (thus separating them from the rest of the family) for it to be their primary residence > You don't say anything about residing in it. of course I did, that is what primary residence means: the place in which you primarily reside. Obviously you cannot legally claim a place as your primary residence if it isn't. whatever laws and regulations China has around that, they aren't the ones in effect here
Panzer04 3y ago
It doesn't. It's a populist policy usually proposed by people who don't understand how markets work. The most generous interpretation is they think everyone wants to be a landowner and this policy would help them.
dionidium 3y ago
They get cause and effect backwards. What they think is happening: investors are buying lots of houses, which is driving up prices, so getting them out of that business would lower prices. What's really happening: supply shortages are driving up prices, which is making housing more attractive to investors.
- ethanbond 3y ago
  It’s a feedback loop so it’s both directions.
  - kjkjadksj 3y ago
    Blackrock isn’t driving the demand though they merely position themselves where it already is
francisofascii 3y ago
Taxing more doesn’t create new houses, but it does lower prices by making the properties less desirable to investors.
- el_don_almighty 3y ago
  Investors don't pay taxes on real estate They pass these costs directly to the renter The occupants pay real estate taxes
  - francisofascii 3y ago
    Not sure where you live, but in most cases, The owner pays property tax. The rental price is based on the market rate and is not tied to the property taxes at all. Landlords will set the price as high as possible to secure occupancy regardless of the taxes they pay.
triceratops 3y ago
Correctly pricing a scarce resource incentivizes more efficient use of that resource. If the property tax on your $4m SFH in Palo Alto is too high, you'll be very motivated to turn it into a 4-plex. You'll go to city council meetings, and vote against single-family zoning, and fight NIMBY lawsuits. (Or you'll have to sell to someone who will do all of the above or pay the higher tax that you can't afford)
- sroussey 3y ago
  Or you move out so a richer person can move in.
- kjkjadksj 3y ago
  Or it would go the other way. Just as it did when prop 13 was first passed in the face of increased assessments from demand.
deleted 3y ago
[deleted]

zjp 3y ago

Long-term renting is just not recognized as legitimate housing in America. We are all temporarily embarrassed homeowners.

prepend 3y ago
It is recognized. But I think the goal is that 90% of people should be homeowners and getting people there. For the vast majority of people, owning a home is superior to renting. So I think most home policy is in getting people able to purchase, own, and sustain their own home. Certainly, some people’s situation makes rent better, but it’s much smaller than people who should buy. But it’s too expensive to buy for too many people. I don’t think someone should be embarrassed, but it’s not like the goal here is to get more people renting and fewer owning.
- mistrial9 3y ago
  > the goal is that 90% of people should be homeowners yeah right - info welcome from those that read giant books on the 2008 credit events.. one thread in that is that it was a clumsy and heavy-handed, politics-origin set of decisions to make "sub-prime" mortgage rates available widely, in order to move the homeownership rates in the general population from sixty-something percent to the glory-lands of ninety-something percent. Well, in fact lending policy at scale did not do that, and as a side-effect the entire US and possible dollar-based credit system cracked at the base. The strongest economy in the world, actually almost did choke on credit. Meanwhile, a recent study echoed here on YNews said that "A million homes are being kept empty while housing costs soar" WSJ . How does one reconcile this?
  - prepend 3y ago
    Sell the million homes to people who need homes? Seems like a simple option.

tannedNerd 3y ago

The key difference is that it’s not someone’s primary residence. Even I as a fairly libertarian person think it’s not a terrible policy to keep someone’s primary residence at a cheap tax level but increase the tax levels to prevent homes sitting empty for 50 out of the 52 weeks a year. Land is a finite resource. If we make the it more expensive to keep that house empty maybe it will be rented out to someone in which case you just increased the housing supply without having to build anything.

seanmcdirmid 3y ago
If you go that route, people will game it by dividing it among family. Instead, an unoccupied housing tax might make more sense, which is what they do in Vancouver. A real land/property tax that forces productive use of land is also needed, but repealing prop 13 is probably never going to happen.
- ImPostingOnHN 3y ago
  > If you go that route, people will game it by dividing it among family That's okay, because it is solving the problem Either, A) the family member had another primary residence that they're vacating to make this their primary residence, thus freeing up the old property for someone to buy, or B) the family member didn't already have a home, and the number of people with a home increases by 1, which is what we're trying to do in the first place
  - seanmcdirmid 3y ago
    Most families have at least two people, so husband house and wife house is completely possible. You don't say anything about residing in it. Anyways, this is a well studied problem in China where they tried this, and almost everyone successfully gamed the system that it was a no-op.
    - ImPostingOnHN 3y ago
      families would not have one of the spouses or one of their young children claim a separate home as their primary residence, because they would have to actually live there (thus separating them from the rest of the family) for it to be their primary residence > You don't say anything about residing in it. of course I did, that is what primary residence means: the place in which you primarily reside. Obviously you cannot legally claim a place as your primary residence if it isn't. whatever laws and regulations China has around that, they aren't the ones in effect here

Panzer04 3y ago

It doesn't. It's a populist policy usually proposed by people who don't understand how markets work. The most generous interpretation is they think everyone wants to be a landowner and this policy would help them.

dionidium 3y ago

They get cause and effect backwards. What they think is happening: investors are buying lots of houses, which is driving up prices, so getting them out of that business would lower prices. What's really happening: supply shortages are driving up prices, which is making housing more attractive to investors.

ethanbond 3y ago
It’s a feedback loop so it’s both directions.
- kjkjadksj 3y ago
  Blackrock isn’t driving the demand though they merely position themselves where it already is

francisofascii 3y ago

Taxing more doesn’t create new houses, but it does lower prices by making the properties less desirable to investors.

el_don_almighty 3y ago
Investors don't pay taxes on real estate They pass these costs directly to the renter The occupants pay real estate taxes
- francisofascii 3y ago
  Not sure where you live, but in most cases, The owner pays property tax. The rental price is based on the market rate and is not tied to the property taxes at all. Landlords will set the price as high as possible to secure occupancy regardless of the taxes they pay.

triceratops 3y ago

Correctly pricing a scarce resource incentivizes more efficient use of that resource. If the property tax on your $4m SFH in Palo Alto is too high, you'll be very motivated to turn it into a 4-plex. You'll go to city council meetings, and vote against single-family zoning, and fight NIMBY lawsuits. (Or you'll have to sell to someone who will do all of the above or pay the higher tax that you can't afford)

sroussey 3y ago
Or you move out so a richer person can move in.
kjkjadksj 3y ago
Or it would go the other way. Just as it did when prop 13 was first passed in the face of increased assessments from demand.

deleted 3y ago

[deleted]