4 ms·

I think this strategy would also tax unoccupied housing. Because if it's unoccupied, you're a de facto nonresident. The broader idea is to tax absentee landlor

by gen220 3y ago

I think this strategy would also tax unoccupied housing. Because if it's unoccupied, you're a de facto nonresident. The broader idea is to tax absentee landlords and pied a terres, in favor of the people who actually live in the city. Moral justification of the tax is that if you want to profit off a community's residents while not living amongst them, you have to pay differentially higher taxes for the right (which would presumably benefit the civic life of those residents).

JumpCrisscross 3y ago
> idea is to tax absentee landlords and pied a terres, in favor of the people who actually live in the city The point is taxing "absentee landlords" means taxing the people who rent from them. These sorts of policies sound clever, but they don't change the supply nor demand, and so just wind up raising housing prices more. There isn't a loophole around supply and demand other than rationing, i.e. a community board deciding who can and cannot move in. (The answer is always white people.)
- r00fus 3y ago
  > The point is taxing "absentee landlords" means taxing the people who rent from them This is the same logic that says any tax simply increases the price. That's not how the price/availability curve works, there are many places that simply mint money because of collusion amongst landlords.
- gen220 3y ago
  I think that's a good criticism. It assumes that rent demand would be perfectly elastic in response to the step-up in property tax, but I'm not sure if that holds provided you pick a high enough differential tax. If a family is paying $3k/month to rent out a $800k single-family home, and we tax the landlord 15% the value on the home, could he find a family to pay $13k/month in rent (covering the tax)? I think this would just cause the value of the home to crater, to come closer to a reality that tolerates $3k/month-ish rent. To the point where the property value is low enough that the resident family can just buy a property.
  - r00fus 3y ago
    If we're talking about rent-seeking corporations also being subject to the tax, then it would also prevent them from seeing the same returns and perhaps There's also a bill out there that would simply preclude hedge funds ownership of single-family homes: https://www.housingwire.com/articles/democrats-introduce-bills-to-ban-hedge-funds-from-single-family-housing-market/ https://www.housingwire.com/articles/democrats-introduce-bil... The combination of taxing rented property + reducing corporate ownership would do wonders for affordability. It would also stall or crater any retirement/dynastic wealth plan based on renting SFH properties.
    - gen220 3y ago
      Corporate entities are an obvious scapegoat, that we should definitely preclude from SFH (and MFH) ownership, and I'm sure that bill would be really popular among the electorate. In most locales, from what I've seen, it's the retirement/dynastic wealth folks who are squeezing supply – they've been in this game for 30+ years and have a big head start on the PE firms. Crafting a bill with popular support that targets those folks is going to be a bit more challenging, because these people are not all terribly extractive, and a lot of up and coming people still actively aspire to become those people. In my observation, the younger and less gainfully employed / marketably skilled these people are, the more extractive they are. As such, I think it's a matter of time before we hit a breaking point. There's precedent for this in American history, where we've had dramatic step-changes to property law in response to varying-degrees-of-obvious injustice. I don't know if my generation will develop the political will to enact it, but it does feel inevitable that it'll happen in the next 80 years. It's either that, or we've become an effectively-feudal and urban society – which feels less likely, to me.
      - r00fus 3y ago
        I stand by my point - removing the massive upward pricing pressure from corporate entities will cause the market to balance itself much more readily even with the dynastic wealth grifters. Over the past 5 years, I have gotten no shortage of "cash buyer offers" for our property, and I have no doubt the counterparty in almost all of those cases were corporations. Remove that, and the lack of upward pricing pressure will force a reversion to the mean, which makes it more costly/risky to seek rents.

by gen220 3y ago

JumpCrisscross 3y ago

> idea is to tax absentee landlords and pied a terres, in favor of the people who actually live in the city The point is taxing "absentee landlords" means taxing the people who rent from them. These sorts of policies sound clever, but they don't change the supply nor demand, and so just wind up raising housing prices more. There isn't a loophole around supply and demand other than rationing, i.e. a community board deciding who can and cannot move in. (The answer is always white people.)

r00fus 3y ago
> The point is taxing "absentee landlords" means taxing the people who rent from them This is the same logic that says any tax simply increases the price. That's not how the price/availability curve works, there are many places that simply mint money because of collusion amongst landlords.
gen220 3y ago
I think that's a good criticism. It assumes that rent demand would be perfectly elastic in response to the step-up in property tax, but I'm not sure if that holds provided you pick a high enough differential tax. If a family is paying $3k/month to rent out a $800k single-family home, and we tax the landlord 15% the value on the home, could he find a family to pay $13k/month in rent (covering the tax)? I think this would just cause the value of the home to crater, to come closer to a reality that tolerates $3k/month-ish rent. To the point where the property value is low enough that the resident family can just buy a property.
- r00fus 3y ago
  If we're talking about rent-seeking corporations also being subject to the tax, then it would also prevent them from seeing the same returns and perhaps There's also a bill out there that would simply preclude hedge funds ownership of single-family homes: https://www.housingwire.com/articles/democrats-introduce-bills-to-ban-hedge-funds-from-single-family-housing-market/ https://www.housingwire.com/articles/democrats-introduce-bil... The combination of taxing rented property + reducing corporate ownership would do wonders for affordability. It would also stall or crater any retirement/dynastic wealth plan based on renting SFH properties.
  - gen220 3y ago
    Corporate entities are an obvious scapegoat, that we should definitely preclude from SFH (and MFH) ownership, and I'm sure that bill would be really popular among the electorate. In most locales, from what I've seen, it's the retirement/dynastic wealth folks who are squeezing supply – they've been in this game for 30+ years and have a big head start on the PE firms. Crafting a bill with popular support that targets those folks is going to be a bit more challenging, because these people are not all terribly extractive, and a lot of up and coming people still actively aspire to become those people. In my observation, the younger and less gainfully employed / marketably skilled these people are, the more extractive they are. As such, I think it's a matter of time before we hit a breaking point. There's precedent for this in American history, where we've had dramatic step-changes to property law in response to varying-degrees-of-obvious injustice. I don't know if my generation will develop the political will to enact it, but it does feel inevitable that it'll happen in the next 80 years. It's either that, or we've become an effectively-feudal and urban society – which feels less likely, to me.
    - r00fus 3y ago
      I stand by my point - removing the massive upward pricing pressure from corporate entities will cause the market to balance itself much more readily even with the dynastic wealth grifters. Over the past 5 years, I have gotten no shortage of "cash buyer offers" for our property, and I have no doubt the counterparty in almost all of those cases were corporations. Remove that, and the lack of upward pricing pressure will force a reversion to the mean, which makes it more costly/risky to seek rents.