3 ms·

Quadruple property taxes on any residential property that is not an active primary residence.

jakeinspace 2y ago
Yes, but also we need some more direct incentive for new construction. Real estate as investment property at least used to drive supply. We need massive (tax/interest rate/zoning) incentives for high density construction, both in cities and towns/suburbs. Disincentivizing empty investment properties is the cheapest way for the government, but I think carrot and stick works best.
asdff 2y ago
Which will be passed straight to the renter. The solution is upping the zoned capacity in constrained cities. Theres already enough carrot where these cities are built out to the limits of their zoning already even with all the hoops and red tape for development.
- riku_iki 2y ago
  renters already paying as much as they can be squeezed to pay. Raising prop taxes will push inventory to the market which will become primary residency.
  - seanmcdirmid 2y ago
    It will make life hell for anyone who can’t afford to buy their own house yet. It will also make labor markets less fluid because they are now stuck to their house and can’t take much advantage of flexibility. We might as well implement a Chinese style hukou system while we are at it.
    - riku_iki 2y ago
      I don't understand why do you think so, more cheaper inventory on the market will move things in exactly opposite direction to what you described.
      - seanmcdirmid 2y ago
        No it won’t! Ok, so you’ve gone and made rental housing economically unviable and only homeowners can have housing (everyone else is just homeless I guess). While you’ve made home ownership more feasible, you haven’t really made it feasible for a 19 year old working at McDonalds, or some guy stuck in a crap job in Mississippi who really should move to a better area with the more expensive housing to find a more suitable job (but they can’t since they own their house and they have to sell their house before they move and then be homeless for a while to accumulate more money to buy in that new area). I lived in lots of places for a couple of years or less to take advantage of short term opportunities. You just made those impossible, since there is a lot of overhead in buying and selling a house, and you don’t do that if you are just in a place for two years.
        riku_iki 2y ago
        > you’ve gone and made rental housing economically unviable no, there are different slices here, tons of rentals are hyper-profitable now(acquired on much cheaper and with lower interest rates), they will still exist. > you haven’t really made it feasible for a 19 year old working at McDonalds, or some guy stuck in a crap job in Mississippi the point is that there will be cheap inventory for them too. Once real estate stopped being attractive investment vehicle, there will be huge outflow of capital which will crash prices, and this will actually put huge pressure on rental prices too.
        seanmcdirmid 2y ago
        Even if you get rid of all rental housing, the housing market will crash sure, but the labor market will crash at the same time. So that doesn’t help so much in the short term. Ok, when the labor market comes back, we still have N houses but not everyone can afford those houses, the bank holds them and eventually they fall apart due to maintenance issues (why buffalo NY has a housing shortage even though it has half the population it used to). So maybe we can solve them by just giving the houses away to people, I guess? Can they afford to maintain them? Since the market is inflexible, why should anyone build new ones?
- jt2190 2y ago
  The renters would move in and it would become their “primary residence” I think, and thus not be subject to 4x taxation. (It’s a poor choice of terms because we already talk about “primary” residence from the owner’s/landlord’s perspective, not the renter’s.)
amazingamazing 2y ago
Why? Taxes shouldn’t be punitive. Remove barriers to building. The end. People are willing to try everything other than the solution…
- jncfhnb 2y ago
  Taxes should absolutely be punitive for socially destructive behaviors.
Tiktaalik 2y ago
There are jurisdictions that have done things like this. British Columbia is one that introduced a "Speculation Tax" that was largely a tax on empty homes, with the tax levy being very significant for secondarily owned homes being left empty. The net result is that it added thousands of rentals onto the market! https://dailyhive.com/vancouver/metro-vancouver-rental-housing-market-vacancy-tax https://dailyhive.com/vancouver/metro-vancouver-rental-housi... A very good thing but notably this is mostly a one time increase in homes (though the tax continues to incentivize newly built condos to be rented). So it's a good emergency sort of measure that absolutely helps with a supply shortfall, but in the long term there needs to be followthrough in more systemic policies to build more homes.
- jncfhnb 2y ago
  The influx of units is good. But imo the larger impact is that it’s harder to shop around for wealthier tenants that can pay bigger rents. It helps shift power back to renters.

Yes, but also we need some more direct incentive for new construction. Real estate as investment property at least used to drive supply. We need massive (tax/interest rate/zoning) incentives for high density construction, both in cities and towns/suburbs. Disincentivizing empty investment properties is the cheapest way for the government, but I think carrot and stick works best.

asdff 2y ago

Which will be passed straight to the renter. The solution is upping the zoned capacity in constrained cities. Theres already enough carrot where these cities are built out to the limits of their zoning already even with all the hoops and red tape for development.

riku_iki 2y ago
renters already paying as much as they can be squeezed to pay. Raising prop taxes will push inventory to the market which will become primary residency.
- seanmcdirmid 2y ago
  It will make life hell for anyone who can’t afford to buy their own house yet. It will also make labor markets less fluid because they are now stuck to their house and can’t take much advantage of flexibility. We might as well implement a Chinese style hukou system while we are at it.
  - riku_iki 2y ago
    I don't understand why do you think so, more cheaper inventory on the market will move things in exactly opposite direction to what you described.
    - seanmcdirmid 2y ago
      No it won’t! Ok, so you’ve gone and made rental housing economically unviable and only homeowners can have housing (everyone else is just homeless I guess). While you’ve made home ownership more feasible, you haven’t really made it feasible for a 19 year old working at McDonalds, or some guy stuck in a crap job in Mississippi who really should move to a better area with the more expensive housing to find a more suitable job (but they can’t since they own their house and they have to sell their house before they move and then be homeless for a while to accumulate more money to buy in that new area). I lived in lots of places for a couple of years or less to take advantage of short term opportunities. You just made those impossible, since there is a lot of overhead in buying and selling a house, and you don’t do that if you are just in a place for two years.
      - riku_iki 2y ago
        > you’ve gone and made rental housing economically unviable no, there are different slices here, tons of rentals are hyper-profitable now(acquired on much cheaper and with lower interest rates), they will still exist. > you haven’t really made it feasible for a 19 year old working at McDonalds, or some guy stuck in a crap job in Mississippi the point is that there will be cheap inventory for them too. Once real estate stopped being attractive investment vehicle, there will be huge outflow of capital which will crash prices, and this will actually put huge pressure on rental prices too.
        seanmcdirmid 2y ago
        Even if you get rid of all rental housing, the housing market will crash sure, but the labor market will crash at the same time. So that doesn’t help so much in the short term. Ok, when the labor market comes back, we still have N houses but not everyone can afford those houses, the bank holds them and eventually they fall apart due to maintenance issues (why buffalo NY has a housing shortage even though it has half the population it used to). So maybe we can solve them by just giving the houses away to people, I guess? Can they afford to maintain them? Since the market is inflexible, why should anyone build new ones?
jt2190 2y ago
The renters would move in and it would become their “primary residence” I think, and thus not be subject to 4x taxation. (It’s a poor choice of terms because we already talk about “primary” residence from the owner’s/landlord’s perspective, not the renter’s.)

amazingamazing 2y ago

Why? Taxes shouldn’t be punitive. Remove barriers to building. The end. People are willing to try everything other than the solution…

jncfhnb 2y ago
Taxes should absolutely be punitive for socially destructive behaviors.

Tiktaalik 2y ago

There are jurisdictions that have done things like this. British Columbia is one that introduced a "Speculation Tax" that was largely a tax on empty homes, with the tax levy being very significant for secondarily owned homes being left empty. The net result is that it added thousands of rentals onto the market! https://dailyhive.com/vancouver/metro-vancouver-rental-housing-market-vacancy-tax https://dailyhive.com/vancouver/metro-vancouver-rental-housi... A very good thing but notably this is mostly a one time increase in homes (though the tax continues to incentivize newly built condos to be rented). So it's a good emergency sort of measure that absolutely helps with a supply shortfall, but in the long term there needs to be followthrough in more systemic policies to build more homes.

jncfhnb 2y ago
The influx of units is good. But imo the larger impact is that it’s harder to shop around for wealthier tenants that can pay bigger rents. It helps shift power back to renters.