3 ms·

A single family home is presumably owned by a single family that is actually living in that home. A large building with many apartments is owned by a wealthy la

A single family home is presumably owned by a single family that is actually living in that home. A large building with many apartments is owned by a wealthy landlord who is less likely to be living there. Of course the wealthy landlord should be taxed much more than the single family, that’s just common sense. The problem is that the single family that can afford a whole house in a city, while less wealthy than the big landlord, is likely more wealthy than the tenants in the apartment building. Because the landlord is able to pass down the burden of the property tax to the tenants, the property tax becomes regressive. There is no way to solve this problem by simply changing the rates around. If you lower the property tax on large buildings, it is not guaranteed to ease the burden on tenants. You will likely just end up increasing the profits for the landlords. A true solution requires a systemic change that taxes the landlord, but prevents that tax burden from being passed down to the tenants.

cratermoon 2y ago
> A true solution requires a systemic change that taxes the landlord, but prevents that tax burden from being passed down to the tenants. We have a solution that does that. It's called rent control.
- tharmas 2y ago
  Does rent control work for new tenants? It doesn't in NYC. It only works for long term tenants.
  - danillonunes 2y ago
    It doesn't, but I have a gut feeling that it may impact the prices for new rents in some unexpected ways. For example, people who are living in a rent controlled place may be less likely to leave, this may impact the supply/demand ratio (relatively to the total) and affect the market. Also the apartment owners are aware of the rent control law and so they may try to increase the initial price to try to compensate for it.
- deleted 2y ago
  [deleted]
jeffbee 2y ago
> Because the landlord is able to pass down the burden of the property tax to the tenants, the property tax becomes regressive. Here's the flaw that sinks your argument. Lessors aren't able to pass through taxes to tenants. They charge what the market will bear and leave nothing on the table. When a new tax arrives the increment comes entirely out of the owner's share because the tenants were already paying the market-clearing price.
- Apreche 2y ago
  If that’s the case, then the articles premise is wrong. Property taxes aren’t hurting tenants, and they should be raised on landlords.
  - jeffbee 2y ago
    The article has a few salient points that apply to NY and their peculiar tax regime, but nowhere else.
  - blululu 2y ago
    It’s a complicated pricing issue. The ability to pass a tax onto customers is a function of supply and demand and their relative elasticities. The assertion that the price of housing is a direct function of the costs is false. Consider the inverse: my landlord has their building paid off, but do they pass their savings onto me? The fed drops rates and allows the landlord to refinance: does that make my apartment cheaper? Inversely if my landlords costs go up, they can’t necessarily pass the cost onto me. There are situations where a tax can be passed directly to the customer but it is not guaranteed.

cratermoon 2y ago

> A true solution requires a systemic change that taxes the landlord, but prevents that tax burden from being passed down to the tenants. We have a solution that does that. It's called rent control.

tharmas 2y ago
Does rent control work for new tenants? It doesn't in NYC. It only works for long term tenants.
- danillonunes 2y ago
  It doesn't, but I have a gut feeling that it may impact the prices for new rents in some unexpected ways. For example, people who are living in a rent controlled place may be less likely to leave, this may impact the supply/demand ratio (relatively to the total) and affect the market. Also the apartment owners are aware of the rent control law and so they may try to increase the initial price to try to compensate for it.
deleted 2y ago
[deleted]

jeffbee 2y ago

> Because the landlord is able to pass down the burden of the property tax to the tenants, the property tax becomes regressive. Here's the flaw that sinks your argument. Lessors aren't able to pass through taxes to tenants. They charge what the market will bear and leave nothing on the table. When a new tax arrives the increment comes entirely out of the owner's share because the tenants were already paying the market-clearing price.

Apreche 2y ago
If that’s the case, then the articles premise is wrong. Property taxes aren’t hurting tenants, and they should be raised on landlords.
- jeffbee 2y ago
  The article has a few salient points that apply to NY and their peculiar tax regime, but nowhere else.
- blululu 2y ago
  It’s a complicated pricing issue. The ability to pass a tax onto customers is a function of supply and demand and their relative elasticities. The assertion that the price of housing is a direct function of the costs is false. Consider the inverse: my landlord has their building paid off, but do they pass their savings onto me? The fed drops rates and allows the landlord to refinance: does that make my apartment cheaper? Inversely if my landlords costs go up, they can’t necessarily pass the cost onto me. There are situations where a tax can be passed directly to the customer but it is not guaranteed.