4 ms·
"It's not a loss if you don't sell" is harmless for stocks, but has some negative externalities for real estate. REITs (Real Estate Investment Trusts) demonstra
by ironhaven 2y ago
"It's not a loss if you don't sell" is harmless for stocks, but has some negative externalities for real estate. REITs (Real Estate Investment Trusts) demonstrate the issue for commercial real estate where in order to lower the rent for a property the newest shareholders have to give up their shares. So instead of lowering the rent and recording a loss, junior shareholders would prefer to own a part of an empty lot hoping a business will come along and start renting.
Having millions of empty houses near millions of homeless people is a direct result of real estate owners trying to maximize the value of their assets. The solution to this would be to find a way to decommoditize housing, but that would never happen because that's socialism. Land value tax may be an easier jump to disincentive this inefficiency.
- shiroiushi 2y agoProper taxation that penalizes leaving buildings to sit empty and unused would fix this.
- deepfriedchokes 2y agoPeople game this by claiming children as owners and/or residents (in the residential space). A land value tax would probably be more motivating to encourage productive use.
- readthenotes1 2y ago"find a way to decommoditize housing, but that would never happen because that's socialism" Pull that off without creating a powerful and thus corrupt governmental bureau and I think more people would be on board. I suspect that for many the problem is not socialism but George Orwell's animal farm fable about certain implementations.
- benterix 2y agoThe problem is that most politicians have real estate investments in one form or another so there is zero incentive for such laws to come into existence.
- readthenotes1 2y agoThat's not the only problem...