The poster above you (whittingtonaaon) proposed raising taxes on secondary, tertiary, etc. homes. That makes sense to me but "investors" looking for easy prey would surely hate on such solution. It's not like no one could have thought of this until now.
How do you propose we would — systematically — provide housing to people who, for whatever reason, are not in a position to buy? Should housing be bifurcated into government-provided housing for renters and privately-owned housing for those fortunate enough to have the money and stability to buy? Would you like to live in government housing, or would you prefer to keep the investor-owned rental option, but have them pass a bunch of new taxes onto their customers? Or maybe, just maybe, realize that property rentals are a necessary service that is handled pretty well by the private markets and that landlords are no more or less deserving of earning a profit for the service they provide and risk they take on?
>How do you propose we would — systematically — provide housing to people who, for whatever reason, are not in a position to buy? Should housing be bifurcated into government-provided housing for renters and privately-owned housing for those fortunate enough to have the money and stability to buy?
So...council estates? Subsidized housing is a thing we have.
>realize that property rentals are a necessary service that is handled pretty well by the private markets and that landlords are no more or less deserving of earning a profit for the service they provide and risk they take on?
Landlords don't create added value. I'm skeptical that it is a necessary service; housing is necessary, but is renting housing necessary? Why would that be?
> Landlords don't create added value. I'm skeptical that it is a necessary service; housing is necessary, but is renting housing necessary? Why would that be?
There are many cases where this isn’t true. Many (most) residents in urban areas are transient. They stay for a couple of years, get married, then move to the suburbs or another city to start a family.
There are a bunch of other reasons why someone wouldn’t want to stay in a location for a long period of time.
A house costs more than some people have. Without a rental market, those people become homeless or completely dependant on government. Neither is desirable.
Without the profit incentive, what developer would build a multi unit apartment building to achieve higher density living in cities?
I'd say a house costs more than almost anyone has; it's why people need to take out loans to purchase them. That said, without a rental market the price of houses goes way down. As a result, the people that cannot afford houses then are mostly the same people that cannot currently afford rent. This is because the mortgage payment and insurance for a home is actually lower than the monthly rent. If the top value were lower, it would be a safer risk for a bank but because it's so high, people don't have that access to credit.
A developer still has a profit incentive; mostly the same one they have now, actually. They sell the apartments.
>That said, without a rental market the price of houses goes way down.
I see that you are saying you would simply sell the apartments instead now. What is the solution for (e.g.) new grads who do not have a down payment yet? Why aren't tenants currently pooling their money, purchasing the properties they live at and converting it to a Tenancy in Common?
I do not think prices will drop without a rental market. Prices might even increase because you are making the market much less efficient. It will also make building new units more difficult as there will almost always be a holdout in the building.
They take otherwise-purchasable properties off the market, then make money off preventing other people from owning them in perpetuity.
Some landlords also offer property management services, but that is a separate field entirely. It would be fairly easy for an apartment building to consist of entirely owner-occupied units, who could then join together in a co-op to either put individual local contractors on retainer for things like plumbing, electrical, and miscellaneous repair services, or find a one-stop-shop company to hire for it.
> How do you propose we would — systematically — provide housing to people who, for whatever reason, are not in a position to buy? Should housing be bifurcated into government-provided housing for renters and privately-owned housing for those fortunate enough to have the money and stability to buy?
Without speculators leeching off of them, 20 year old two bedroom units would cost less than they currently rent for each year.
Make property investors actually invest something by only allowing profit or rent on land that has been recently improved.
Why would landlords hate such a system. They can trivially pass on any tax to renters and have the incentives to figure out the loopholes in the tax code. It’s already common for single unit corporations to own rental properties.
Instead of taxing based on who owns the land, tax how it’s used. That way more units will be built increasing supply.
But then you’ll run into the real problem, not landlords, regular home owners who largely have a revealed preference to live on giant plots of land, in big houses far from multi unit dwellings. They’ll continue to use restrictive zoning to limit supply and keep prices up.
Because that means apartment buildings become illegal?
Homeownership is all well and good, but sometimes you really do just need a place to live for a year or two, and having to do a full-fledged real estate transaction at each end of that period is a lot of friction.
The tax the poster proposed was a de facto ban which was my point. But even then it wouldn’t work because some land is more desirable than others and by encumbering land ownership you encourage those that own the more desirable land to extract as much value as possible.
The thing we are dancing around in this thread is do landlords largely determine the housing prices. I think not. I think it’s supply constraints and government subsidized mortgages. These are largely issues driven by regular home owners not landlords.
I like a system whereby individuals can own between one and a bit and three somewhere (including provision for commercial property where large facilities need to rent many people's fungible extra-property rights in some way). Mentioning 100% tax is just to head off idiotic straw men about passing the tax on to renters.
Also allowing benefiting from or even rent seeking on only the increased value of very recent property improvements (like taxing at the value it held 5 years ago with some buy-or-sell challenge type provision to prevent undervaluing).
Most money in real estate isn't made on selling people 2nd homes. Unless I misunderstood your comment and you think corporations and investors shouldn't be able to own more than a single home at once(so landlord abolishment)?
Depends to what level they are raised, of course. Making something prohibitively expensive and then saying "hey look you can still technically do it, it's just not worth your time and you have to really execute everything perfectly" is not super different from just saying you can't do it.
Right, but unless somebody states that is the type of tax they are looking for, it is not appropriate to presume that is what they mean without further information. It seems pretty clear that a primary residence, one secondary home that is used for family vacations at least some of the time, one building/ piece of land that is actively used for a personally operated business, and all other real estate are each distinct categories that should receive different incentives and disincentives from the state - unless you are against governance, but that is another conversation altogether.
I personally think that primary residences should have a 100% homestead exemption, because I don't think you should have to rent your home from the State. And to make up that percentage of income, other real estate should be taxed a little higher. At the same time, there should be intelligent programs in place to make it easier to reach the point where you can own that first home. This last point would undoubtedly work best if there were either financial and/or statutory restrictions on ownership of residential real estate for investment purposes. So, in principle, it makes perfect sense as part of a larger goal of promoting home ownership. The conversation of how to best do this is of course more complex and there are many factors that need to be balanced - more than anything because high taxes raise rents, which would point towards regulation as an important part of the best way of dealing with this.
I do not say this with the US in mind.