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You can't just ban them. Where there is profit to be made, they will find a way around any regulation. You have to change the structure of the market so they n

You can't just ban them. Where there is profit to be made, they will find a way around any regulation. You have to change the structure of the market so they no longer see these investments as profitable. One way local areas do this is by "homestead tax exemption" which reduces property taxes if you live in your own home, but this is binary and punishes small landlords equally as big ones.

notatoad 2y ago
> which reduces property taxes if you live in your own home My town is experimenting with allowing this exemption if anybody claims the address as their primary residence, whether it is the owner or not. The main purpose is to cut down on people keeping vacation homes, but it should also make things more expensive for flippers and speculators. Small landlords are no better than big ones if they’re keeping properties empty.
SoftTalker 2y ago
Those taxes just get added to the rent charged.
- chasebank 2y ago
  Indeed they would, however, the underlying asset value would drop to allow for market rents. That's the point.
  - pc86 2y ago
    In a free market, yes. But not when the demand is so artificially constrained. Rents go up and people are forced to either pay a higher percentage of their income to rent, or move farther away. Housing is not a free market by any stretch of the imagination, so if you just move one lever you don't always get the response you would in a true free market.
debacle 2y ago
It's a complex problem. Some landlords are great, keep nice homes, and take care of the property. Some homeowners are absolute slobs, and don't take care of their properties. But, in general, "landlord" quality is considered the lowest level of effort/materials for maintenance. Once an area reaches a certain % of landlords (no idea the actual %, but it's low), it leads to a general decline of the neighborhood. These landlords are buying starter homes (apartments and houses) whether they are PE companies or individual landlords, driving up the cost of "cheap" housing.
chongli 2y ago
It has to be binary, doesn't it? If it's some sort of progressive scheme with tax brackets based on number of properties owned then PE will find a way to structure their holdings so that each legal entity only owns a single property. The only way to prevent that is to mandate that the owner of the property be an individual (not a business or trust) who resides on that property for more than 183 days per year.
lupusreal 2y ago
Lots of profitable activities are banned and the bans are generally quite effective. For instance, selling cigarettes and liquor to children. Now you might say those bans aren't 100% effective, but why do they need to be 100% to be justifiable?

notatoad 2y ago

> which reduces property taxes if you live in your own home My town is experimenting with allowing this exemption if anybody claims the address as their primary residence, whether it is the owner or not. The main purpose is to cut down on people keeping vacation homes, but it should also make things more expensive for flippers and speculators. Small landlords are no better than big ones if they’re keeping properties empty.

SoftTalker 2y ago

Those taxes just get added to the rent charged.

chasebank 2y ago
Indeed they would, however, the underlying asset value would drop to allow for market rents. That's the point.
- pc86 2y ago
  In a free market, yes. But not when the demand is so artificially constrained. Rents go up and people are forced to either pay a higher percentage of their income to rent, or move farther away. Housing is not a free market by any stretch of the imagination, so if you just move one lever you don't always get the response you would in a true free market.

debacle 2y ago

It's a complex problem. Some landlords are great, keep nice homes, and take care of the property. Some homeowners are absolute slobs, and don't take care of their properties. But, in general, "landlord" quality is considered the lowest level of effort/materials for maintenance. Once an area reaches a certain % of landlords (no idea the actual %, but it's low), it leads to a general decline of the neighborhood. These landlords are buying starter homes (apartments and houses) whether they are PE companies or individual landlords, driving up the cost of "cheap" housing.

chongli 2y ago

It has to be binary, doesn't it? If it's some sort of progressive scheme with tax brackets based on number of properties owned then PE will find a way to structure their holdings so that each legal entity only owns a single property. The only way to prevent that is to mandate that the owner of the property be an individual (not a business or trust) who resides on that property for more than 183 days per year.

lupusreal 2y ago

Lots of profitable activities are banned and the bans are generally quite effective. For instance, selling cigarettes and liquor to children. Now you might say those bans aren't 100% effective, but why do they need to be 100% to be justifiable?