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If a behavior is occurring that is technically legal but the majority believe the behavior is harmful/undesirable we pass laws to stop that behavior. In this c

If a behavior is occurring that is technically legal but the majority believe the behavior is harmful/undesirable we pass laws to stop that behavior. In this case, stopping or slowing this is actually pretty simple: Change the tax code which is currently overly favorable to real estate investors. Specifically: No accelerated depreciation, stretch out the depreciation schedule to 40 years from 27.5, stop allowing 1031 exchanges, eliminate real estate step up tax basis on death, etc.

narcraft 3y ago
Do the majority believe that 3 companies owning 19,000 homes between them in a particular city is harmful/undesirable behavior? Why? There's nothing obviously bad about that fact alone. How many houses are in Atlanta? The possibility that there are hundreds of LLCs shared between these 3 companies seems a bit suspect on the surface, but I could see how they could be simply acquiring smaller companies naturally. Idk how difficult it is or isn't to consolidate smaller LLCs into larger ones, but the implication of the article seems to be that this is a deliberate tactic to limit the amount of money these companies can be sued for in any one given case. Maybe, but would need more details to see that this is clearly what is happening and how much harm it is causing to aggrieved tenants.
- bombcar 3y ago
  I dare say the majority of renters feel the "rent is too damn high" - I've rarely found someone wishing they could pay more rent for what they're currently in (usually if they can afford more rent they move to something bigger/better). So the missing link is somehow proving the causality between "rents are high" and "3 companies own 19,000 rentals". That may seem obvious but could be very difficult to prove, especially as it may not be correct. Walmart owns 25% of the grocery business in the USA - does anyone really think grocery prices would go down if they divested? (It may still be better for society for them to do so, lowest price is not the only measurement, of course.)
- bequanna 3y ago
  Yea, I don’t think the LLC liability game is that big of a deal. First, most of these companies will hold large liability insurance protection. But also, if someone sues and can prove negligence they can go further up the chain to the individual holding companies making the LLC shell game irrelevant.
bombcar 3y ago
None of those would do much against these behemoths, but they would harm the smallest landlords (which might be the intention). The "best" might be to adjust property tax on a given description of dwelling unit such that it's pretty annoyingly high, but each family effectively gets one for free. Then corporations and multi-unit owners would pay that, but individuals wouldn't. Prop 13 in CA would be much less of an issue if it excluded commercial real estate and only applied to "homesteads" owned and held by the resident owners.
- bequanna 3y ago
  Companies don’t pay property tax, their renters do. I say this as someone who owned rental properties in an area that jacked up property taxes. Me and all the other landlords simply raised rent to compensate.
  - bombcar 3y ago
    Sure, companies never pay anything, their customers do. But if your property tax was 200%, and a home-owner's was 1%, things would change. Now the argument about what the "minimal available housing" should be would come into play, because people who could not buy no matter what would now be homeless ...
    - bequanna 3y ago
      Right. I just think property tax is the wrong lever to pull here. I think we should remove carrots (the tax advantages at the federal level) instead of trying to penalize via harsher taxes.

narcraft 3y ago

Do the majority believe that 3 companies owning 19,000 homes between them in a particular city is harmful/undesirable behavior? Why? There's nothing obviously bad about that fact alone. How many houses are in Atlanta? The possibility that there are hundreds of LLCs shared between these 3 companies seems a bit suspect on the surface, but I could see how they could be simply acquiring smaller companies naturally. Idk how difficult it is or isn't to consolidate smaller LLCs into larger ones, but the implication of the article seems to be that this is a deliberate tactic to limit the amount of money these companies can be sued for in any one given case. Maybe, but would need more details to see that this is clearly what is happening and how much harm it is causing to aggrieved tenants.

bombcar 3y ago
I dare say the majority of renters feel the "rent is too damn high" - I've rarely found someone wishing they could pay more rent for what they're currently in (usually if they can afford more rent they move to something bigger/better). So the missing link is somehow proving the causality between "rents are high" and "3 companies own 19,000 rentals". That may seem obvious but could be very difficult to prove, especially as it may not be correct. Walmart owns 25% of the grocery business in the USA - does anyone really think grocery prices would go down if they divested? (It may still be better for society for them to do so, lowest price is not the only measurement, of course.)
bequanna 3y ago
Yea, I don’t think the LLC liability game is that big of a deal. First, most of these companies will hold large liability insurance protection. But also, if someone sues and can prove negligence they can go further up the chain to the individual holding companies making the LLC shell game irrelevant.

bombcar 3y ago

None of those would do much against these behemoths, but they would harm the smallest landlords (which might be the intention). The "best" might be to adjust property tax on a given description of dwelling unit such that it's pretty annoyingly high, but each family effectively gets one for free. Then corporations and multi-unit owners would pay that, but individuals wouldn't. Prop 13 in CA would be much less of an issue if it excluded commercial real estate and only applied to "homesteads" owned and held by the resident owners.

bequanna 3y ago
Companies don’t pay property tax, their renters do. I say this as someone who owned rental properties in an area that jacked up property taxes. Me and all the other landlords simply raised rent to compensate.
- bombcar 3y ago
  Sure, companies never pay anything, their customers do. But if your property tax was 200%, and a home-owner's was 1%, things would change. Now the argument about what the "minimal available housing" should be would come into play, because people who could not buy no matter what would now be homeless ...
  - bequanna 3y ago
    Right. I just think property tax is the wrong lever to pull here. I think we should remove carrots (the tax advantages at the federal level) instead of trying to penalize via harsher taxes.