4 ms·

A useful starting point in dealing with this (and the housing crisis in general) would be to determine what proportion of homes are not being used as a primary

by tmnvix 3y ago

A useful starting point in dealing with this (and the housing crisis in general) would be to determine what proportion of homes are not being used as a primary residence. I suspect it has risen dramatically over the past couple of decades. If it turns out that that is the case, the next step would be to find out why.

causi 3y ago
There's something very gross about owning a home you don't live it.
- tmnvix 3y ago
  In the past, owning a 'second' or 'holiday' home was an expensive proposition - it actually cost you money. For some time now - because of rapid capital gains and the short term rental market - it makes you money. Many more people are willing and able to do it.
  - darkwizard42 3y ago
    Actually, this seems to be largely an American problem. In Europe, Canada, and Mexico (at least just these areas I'm familiar with), it was common to have a cottage or small home in a faraway part of the "countryside" as a mini-vacation home. Definitely wasn't accessible to everyone, but was FAR from the level of wealth needed in America to operate a "second-home"
    - tmnvix 3y ago
      The same applies to New Zealand. Lots of families would own a 'bach' in some remote area near a lake, river, or on the coast. These were typically very basic - what you might call a cabin in North America. Nowadays though, it's common to own that second dwelling in a city or other built up area. Just last week I was talking with a family member (mid-60s, about to retire). They are planning on buying a small apartment in the city their son and grandchildren live in. They are not selling their existing house in another city to do this. They plan to use it only while visiting and have explicitly stated that they see it as an investment. They are by no means 'rich'. 30 years ago this would have been unheard of for people in their position.
- ejb999 3y ago
  I get what you are saying, but lots of people can only rent - or only want to rent - so somebody needs to own those houses. I do agree, there is really something weird about owning 'extra' houses that you may only use a few weeks a year.
- cycrutchfield 3y ago
  OK, I’ll bite: why should you care about what other people own?
  - tmnvix 3y ago
    I think most people would be a bit put out if a significant portion of the radio spectrum was owned by people that were not utilising it (or only using it to send their Christmas messages).
    - cycrutchfield 3y ago
      But in this case most housing is being utilized, either owner-occupied or rented.
  - alistairSH 3y ago
    If a house in a popular area sits dormant, that's one less unit available to house the general public. Reductio ad absurdum... if rich Chinese businesspeople buy every home in Vancouver (strictly to park money, not live or rent), nobody who works in Vancouver can live there and everybody has to commute from the suburbs. Edit - at an indivual level, you're right, who cares. At a policy level, ensuring reasonable housing for the general public is a good thing.
    - cycrutchfield 3y ago
      If people want to buy houses and not live in them, more power to them as long as they pay their property taxes. Housing is not a finite resource, more can simply be built as long as there is demand for it. At a policy level, we sure are spending a lot of time worrying about the fraction of a percent of houses that are not being rented and not nearly enough time worrying about why not enough new housing is being built to meet demand.
  - causi 3y ago
    Land is a finite resource that nobody created. Would you be offended if someone claimed to own a cubic kilometer of the sky and declared nobody else could use it without paying him?
pdonis 3y ago
A graph from Statista [1] indicates the opposite: the fraction of US housing units occupied by the owner in 2022 was almost double what it was in 1975. Another pertinent question would be the overall supply of housing: one obvious factor that could help explain the graph I just described is that the overall supply of US housing has gone down, meaning that fewer owners are in a position to rent out property at all. Hence the supply of rental properties is significantly decreased, which will drive up the price. [1] https://www.statista.com/statistics/187576/housing-units-occupied-by-owner-in-the-us-since-1975/ https://www.statista.com/statistics/187576/housing-units-occ...
- tmnvix 3y ago
  If I'm not mistaken, the graph you have referred to shows the total number of owner occupied homes - not the proportion. Edit: I'm also not sure that their definition of owner occupied excludes second homes. From the linked page: > Owner occupied housing is where the person who owns a property – either outright or through a mortgage – also resides in the property. Excluded are therefore rental properties, employer-provided housing and social housing.
  - pdonis 3y ago
    > the graph you have referred to shows the total number of owner occupied homes - not the proportion Hm, yes, you're right, I was misreading the y axis. > I'm also not sure that their definition of owner occupied excludes second homes. "Resides" generally means principal residence, which excludes second homes. However, it would be nice if the site would clarify that.
wnc3141 3y ago
we absolutely need to progressively tax property by number of properties owned. As you own more of a scarce asset, margins on rents are driven toward zero. An aside, I often see worry of corporate ownership of property. While of course this is an issue, the bulk (72%) 1. of the problem lies with simply affluent people who own (fewer than ten) investment properties. I do think however, a fair penalty is to just tax based on the degree of rentiership from property investing, therefore a marginal tax on number of properties owned seems reasonable. 1 https://www.pewresearch.org/short-reads/2021/08/02/as-national-eviction-ban-expires-a-look-at-who-rents-and-who-owns-in-the-u-s/ https://www.pewresearch.org/short-reads/2021/08/02/as-nation...
- brightball 3y ago
  Agreed https://news.ycombinator.com/item?id=39293808 https://news.ycombinator.com/item?id=39293808
- TedDoesntTalk 3y ago
  Your solution to high rents is to increase taxes?
  - wnc3141 3y ago
    Essentially yeah, it suppresses the crowding out effect of homes rented out which otherwise crowds out first time home buyers in terms of price and access to capital. Also by making each marginal investment property more costly, instances of collusion or monopolistic conditions will reduce as, if occupants have a preference for renting (which I would doubt), there would be more smaller landlords -read as more market competition. Unfettered use of housing stock as an investment is inefficient and frankly undemocratic as the delta between ownership and renting entrenches inherited wealth. Ideally, although up for debate, would be to use marginal tax to fund creation of low income housing units as Santa Fe NM has recently implemented as a luxury tax on new home purchases.
    - wnc3141 3y ago
      Important to note is that rentiership, by definition, is a non productive use of capital. (A housing unit does not produce anything, as other deployments of capital do)
brightball 3y ago
You hit the nail on the head here. The simplest way to solve this problem is a stepped increase in property taxes for home which are not the primary residence. Just as an example: Assume a baseline property tax level of say, 6%. Primary residence - 2% discount to 4% Non-primary residence, in same region (county/city) as primary = 6% Non-primary residence, not in same region as primary = increase 2% to 8% Non-primary residence owned by a corporate entity rather than a citizen = increase 4% to 10%. You do that, it should make doing things like this much harder. https://www.cnbc.com/2023/02/21/how-wall-street-bought-single-family-homes-and-put-them-up-for-rent.html https://www.cnbc.com/2023/02/21/how-wall-street-bought-singl...
- dmazzoni 3y ago
  FWIW, the highest property taxes in the country right now are <2.5% So your idea is fine, but the numbers are way off. My proposal would be more like: Primary residence: 1% Rental property with 1y+ lease: 1.5% First secondary residence, owner-occupied seasonally: 2% Third residence, vacant, or full-time short-term rental: 5%
  - seanmcdirmid 3y ago
    > Rental property with 1y+ lease: 1.5% Isn't that going to push up the price of lower end apartment rentals? Why would we try to squeeze more money from poor people to the benefit of richer home owners?
dmazzoni 3y ago
We should dramatically increase taxes on: 1. Homes that are vacant for more than 6 months out of the year 2. Homes that are short-term rentals for more than 6 months out of the year Incentivize owners to either get long-term tenants in, or sell. AirBnB is making things much worse. Landlords have discovered that turning a house into a short-term rental property is more lucrative than having a long-term tenant. That's horrible for the long-term rental market when everyone does that. We don't need to make it illegal. Just tax the shit out of it and disincentivize it.

by tmnvix 3y ago

causi 3y ago

There's something very gross about owning a home you don't live it.

tmnvix 3y ago
In the past, owning a 'second' or 'holiday' home was an expensive proposition - it actually cost you money. For some time now - because of rapid capital gains and the short term rental market - it makes you money. Many more people are willing and able to do it.
- darkwizard42 3y ago
  Actually, this seems to be largely an American problem. In Europe, Canada, and Mexico (at least just these areas I'm familiar with), it was common to have a cottage or small home in a faraway part of the "countryside" as a mini-vacation home. Definitely wasn't accessible to everyone, but was FAR from the level of wealth needed in America to operate a "second-home"
  - tmnvix 3y ago
    The same applies to New Zealand. Lots of families would own a 'bach' in some remote area near a lake, river, or on the coast. These were typically very basic - what you might call a cabin in North America. Nowadays though, it's common to own that second dwelling in a city or other built up area. Just last week I was talking with a family member (mid-60s, about to retire). They are planning on buying a small apartment in the city their son and grandchildren live in. They are not selling their existing house in another city to do this. They plan to use it only while visiting and have explicitly stated that they see it as an investment. They are by no means 'rich'. 30 years ago this would have been unheard of for people in their position.
ejb999 3y ago
I get what you are saying, but lots of people can only rent - or only want to rent - so somebody needs to own those houses. I do agree, there is really something weird about owning 'extra' houses that you may only use a few weeks a year.
cycrutchfield 3y ago
OK, I’ll bite: why should you care about what other people own?
- tmnvix 3y ago
  I think most people would be a bit put out if a significant portion of the radio spectrum was owned by people that were not utilising it (or only using it to send their Christmas messages).
  - cycrutchfield 3y ago
    But in this case most housing is being utilized, either owner-occupied or rented.
- alistairSH 3y ago
  If a house in a popular area sits dormant, that's one less unit available to house the general public. Reductio ad absurdum... if rich Chinese businesspeople buy every home in Vancouver (strictly to park money, not live or rent), nobody who works in Vancouver can live there and everybody has to commute from the suburbs. Edit - at an indivual level, you're right, who cares. At a policy level, ensuring reasonable housing for the general public is a good thing.
  - cycrutchfield 3y ago
    If people want to buy houses and not live in them, more power to them as long as they pay their property taxes. Housing is not a finite resource, more can simply be built as long as there is demand for it. At a policy level, we sure are spending a lot of time worrying about the fraction of a percent of houses that are not being rented and not nearly enough time worrying about why not enough new housing is being built to meet demand.
- causi 3y ago
  Land is a finite resource that nobody created. Would you be offended if someone claimed to own a cubic kilometer of the sky and declared nobody else could use it without paying him?

pdonis 3y ago

A graph from Statista [1] indicates the opposite: the fraction of US housing units occupied by the owner in 2022 was almost double what it was in 1975. Another pertinent question would be the overall supply of housing: one obvious factor that could help explain the graph I just described is that the overall supply of US housing has gone down, meaning that fewer owners are in a position to rent out property at all. Hence the supply of rental properties is significantly decreased, which will drive up the price. [1] https://www.statista.com/statistics/187576/housing-units-occupied-by-owner-in-the-us-since-1975/ https://www.statista.com/statistics/187576/housing-units-occ...

tmnvix 3y ago
If I'm not mistaken, the graph you have referred to shows the total number of owner occupied homes - not the proportion. Edit: I'm also not sure that their definition of owner occupied excludes second homes. From the linked page: > Owner occupied housing is where the person who owns a property – either outright or through a mortgage – also resides in the property. Excluded are therefore rental properties, employer-provided housing and social housing.
- pdonis 3y ago
  > the graph you have referred to shows the total number of owner occupied homes - not the proportion Hm, yes, you're right, I was misreading the y axis. > I'm also not sure that their definition of owner occupied excludes second homes. "Resides" generally means principal residence, which excludes second homes. However, it would be nice if the site would clarify that.

wnc3141 3y ago

we absolutely need to progressively tax property by number of properties owned. As you own more of a scarce asset, margins on rents are driven toward zero. An aside, I often see worry of corporate ownership of property. While of course this is an issue, the bulk (72%) 1. of the problem lies with simply affluent people who own (fewer than ten) investment properties. I do think however, a fair penalty is to just tax based on the degree of rentiership from property investing, therefore a marginal tax on number of properties owned seems reasonable. 1 https://www.pewresearch.org/short-reads/2021/08/02/as-national-eviction-ban-expires-a-look-at-who-rents-and-who-owns-in-the-u-s/ https://www.pewresearch.org/short-reads/2021/08/02/as-nation...

brightball 3y ago
Agreed https://news.ycombinator.com/item?id=39293808 https://news.ycombinator.com/item?id=39293808
TedDoesntTalk 3y ago
Your solution to high rents is to increase taxes?
- wnc3141 3y ago
  Essentially yeah, it suppresses the crowding out effect of homes rented out which otherwise crowds out first time home buyers in terms of price and access to capital. Also by making each marginal investment property more costly, instances of collusion or monopolistic conditions will reduce as, if occupants have a preference for renting (which I would doubt), there would be more smaller landlords -read as more market competition. Unfettered use of housing stock as an investment is inefficient and frankly undemocratic as the delta between ownership and renting entrenches inherited wealth. Ideally, although up for debate, would be to use marginal tax to fund creation of low income housing units as Santa Fe NM has recently implemented as a luxury tax on new home purchases.
  - wnc3141 3y ago
    Important to note is that rentiership, by definition, is a non productive use of capital. (A housing unit does not produce anything, as other deployments of capital do)

brightball 3y ago

You hit the nail on the head here. The simplest way to solve this problem is a stepped increase in property taxes for home which are not the primary residence. Just as an example: Assume a baseline property tax level of say, 6%. Primary residence - 2% discount to 4% Non-primary residence, in same region (county/city) as primary = 6% Non-primary residence, not in same region as primary = increase 2% to 8% Non-primary residence owned by a corporate entity rather than a citizen = increase 4% to 10%. You do that, it should make doing things like this much harder. https://www.cnbc.com/2023/02/21/how-wall-street-bought-single-family-homes-and-put-them-up-for-rent.html https://www.cnbc.com/2023/02/21/how-wall-street-bought-singl...

dmazzoni 3y ago
FWIW, the highest property taxes in the country right now are <2.5% So your idea is fine, but the numbers are way off. My proposal would be more like: Primary residence: 1% Rental property with 1y+ lease: 1.5% First secondary residence, owner-occupied seasonally: 2% Third residence, vacant, or full-time short-term rental: 5%
- seanmcdirmid 3y ago
  > Rental property with 1y+ lease: 1.5% Isn't that going to push up the price of lower end apartment rentals? Why would we try to squeeze more money from poor people to the benefit of richer home owners?

dmazzoni 3y ago

We should dramatically increase taxes on: 1. Homes that are vacant for more than 6 months out of the year 2. Homes that are short-term rentals for more than 6 months out of the year Incentivize owners to either get long-term tenants in, or sell. AirBnB is making things much worse. Landlords have discovered that turning a house into a short-term rental property is more lucrative than having a long-term tenant. That's horrible for the long-term rental market when everyone does that. We don't need to make it illegal. Just tax the shit out of it and disincentivize it.