Dutch cities want to ban property investors in all neighborhoods • Hacker News Board

Re: Dutch cities want to ban property investors in all neighborhoods

#311

Post by simonh » Sun, Sep 05, 2021, 1:10 PM UTC

R0b0t1 wrote: post #172

simonh wrote: post #144

Earlier quoted context omitted.

I don’t think the article is saying ownership is a bad thing in itself, but that the vast resources that have been poured into promoting and subsidising it have had some pretty undesirable consequences. Here in the UK we have started imposing tax penalties on buy to rent that disincentivizes owning more than one or two rental properties. The problem with punishing institutional investors is it would take huge amounts…

Home prices are up because there is no supply. There's no supply because people can't afford to build houses. The issue isn't home ownership, it's the lack of it. An LVT might work but I think it is only ethical if you advantage primary residences with a complete lack of tax.

It can’t simultaneously be true that people are paying huge sums fir houses, driving prices up, and they can’t afford to build new houses. New construction is generally much cheaper than buying an existing house. The lack of new house building is reluctance to grant planning permission due to NIMBYism.

One of the points of an LVT, among other things, is to encourage little old ladies living in 4 bedroom houses to move somewhere smaller. It’s actually a very equitable tax that reduces distortions in markets and reduces inequality. I highly encourage you to read up on it.

https://en.wikipedia.org/wiki/Land_value_tax

Re: Dutch cities want to ban property investors in all neighborhoods

#312

Post by heresie-dabord » Sun, Sep 05, 2021, 1:13 PM UTC

dmje wrote: post #25

Amen to this. Two case studies from the UK I've been thinking about recently: 1) Visiting London and spending time in South Kensington - walking back to hotel at night, only about 30% of houses had any lights on. Suggestion is the others are effectively uninhabited, and a search on RightMove shows properties sell for £20-£30m for a 4/5 bed. This isn't normal Londoners, it's outside investment. 2) Cornwall, where I li…

Wages have been stagnant for decades while the cost of living has increased... and now housing has become a privilege.

Yes, there are "rich foreigners" and some corporations are strategically acquiring the places and spaces where high rent can be extracted. But what has driven housing cost in the market of individual homes is simply that some citizens can afford to borrow at low rates, and other citizens are seizing the opportunity to realise gains that they could not attain through a lifetime of work, wage increases, and other investing.

It is grim to work for years and have nothing else to show for it.

Young families, workers, the elderly, and the poor will be unable to afford even tenancy in the big cities. (To turn dark for just a moment, we only really seem to have a plan for the elderly.) The future control of crucial urban voting-blocks in Western democracies will be in the hands of landlords.

Re: Dutch cities want to ban property investors in all neighborhoods

#313

Post by ClumsyPilot » Sun, Sep 05, 2021, 1:13 PM UTC

ForHackernews wrote: post #130

makomk wrote: post #106

Earlier quoted context omitted.

Unfortunately, the British press and all the wealthy people with second homes still have Brexit as a scapegoat for why cafes and shops in tourist destinations can't find staff. Never mind the fact that AirBNB and second homes have pushed up house prices and rents to the point that it's impossible to live there on the kind of pay those jobs have, according to the media it's all the fault of Brexit driving away the for…

That's a self-correcting problem, isn't it? Either those cafes and shops will raise prices and pay their staff more, or they'll close down. I've never understood why we're supposed to feel bad for "small business owners" who won't find staff when paying peanuts for their crappy jobs.

Your solution is the problem. The house prices are a blood-sucking squid, and you are pay for them every time you get a coffee or get any service - half the money is going to the labdowner that contributes nothing to the economy. That's why a coffee costs £5 and a plumber charges £100 an hour

But we have fools that celebrate rising house prices because their nominal net worth went up

Re: Dutch cities want to ban property investors in all neighborhoods

#314

Post by sideshowb » Sun, Sep 05, 2021, 1:16 PM UTC

taffronaut wrote: post #275

chrisseaton wrote: post #213

Earlier quoted context omitted.

That’d have to be a £60k house.

They do exist. If you can work remotely or don't mind the commute to Cardiff - welcome to Merthyr! https://www.rightmove.co.uk/house-prices/detailMatching.html...

Not a very popular view among the Valleys LAs though who aspire to be something other than dormitories for Cardiff

Re: Dutch cities want to ban property investors in all neighborhoods

#315

Post by galdosdi » Sun, Sep 05, 2021, 1:17 PM UTC

DrBazza wrote: post #194

iso1210 wrote: post #149

Earlier quoted context omitted.

> Round here in Cornwall the jobs are things like surf instructor, supermarket worker, barperson, etc. That's not gonna stretch to the local house prices. That was the case. A colleague of mine, originally from St Just, moved to London for work as so many have to do. Another from near Cockermouth did the same. Both now work remotely full time from their 'home towns' on decent wages. Covid has done wonders for local c…

> Now sure if you didn't get the education to get a decent job. Hell even on 25k each, Nationwide can lend upto £275k for a first time buyer - just need that deposit. This horrifies me. Even the slightest increase in interest rates will ruin a huge number of home owners. On the other hand, home ownership in the UK isn’t normal either. It’s only since the 50s or perhaps 60s that the average person has been able to aff…

Usually mortgages are a fixed rate for the life of the loan (usually 30 years) -- at least here in the USA. Variable rate (eg "ARM") mortgages are also available but are less common and mostly used for short term flipping and the like, for the very reason you say -- nobody wants to risk a rising payment due to rising rates.

Is the situation very different in the UK? Do Britishers actually prefer variable rate mortgages for some bizarre reason?

Edit: I did my own research and was shocked to find that in the UK it sounds like variable is indeed more or at least as common as fixed and that even fixed tends to be fixed only for the first 5-10 years!This is the opposite of the US, where I know someone on a normal middle class circumstance who just secured a 3.25% 30 year fixed mortgage, and this is extremely common right now if you have good credit. Even the "scary and risky" variable mortgages in America are things like a 5/1 ARM which is fixed for the first 5 years, which sound like they'd be relatively low risk for the UK!

I am baffled. Is the great advantage for the American homeowner simply due to the wages of empire, ie dollar supremacy? Federal policy favoring homeowners? Or what? I did always wonder how banks could afford to provide such a good deal.

This is a vast difference really worth wondering about; I hope someone has some insight.

Source: https://www.money.co.uk/mortgages/should-you-get-a-fixed-tra...

Re: Dutch cities want to ban property investors in all neighborhoods

#316

Post by agilob » Sun, Sep 05, 2021, 1:17 PM UTC

reacharavindh wrote: post #76

I may be biased because I moved recently to the Netherlands and looking to buy our first home and stop paying rent. But, the house prices are crazy out here. I work in tech and my wife is an academic. We earn what is definitely above market average, and it looks like we cannot afford most houses we find in the area where we are renting now(well outside Amsterdam). At this juncture, at least temporarily, investors who…

I'm in Wales and house prices in Amsterdam look incredibly low for better build quality and higher living standard.

Re: Dutch cities want to ban property investors in all neighborhoods

#317

Post by bushbaba » Sun, Sep 05, 2021, 1:19 PM UTC

heresie-dabord wrote: post #312

dmje wrote: post #25

Amen to this. Two case studies from the UK I've been thinking about recently: 1) Visiting London and spending time in South Kensington - walking back to hotel at night, only about 30% of houses had any lights on. Suggestion is the others are effectively uninhabited, and a search on RightMove shows properties sell for £20-£30m for a 4/5 bed. This isn't normal Londoners, it's outside investment. 2) Cornwall, where I li…

Wages have been stagnant for decades while the cost of living has increased... and now housing has become a privilege . Yes, there are "rich foreigners" and some corporations are strategically acquiring the places and spaces where high rent can be extracted. But what has driven housing cost in the market of individual homes is simply that some citizens can afford to borrow at low rates, and other citizens are seizing…

The governments are to blame. If conventional mortgages were capped to 1 per person. And a minimum of 80% ltv was required. Then houses would be cheaper.

Instead the government is letting people put low money down, low interest rates, and buy up many houses at once. That of course inflated housing costs.

Re: Dutch cities want to ban property investors in all neighborhoods

#318

Post by traceroute66 » Sun, Sep 05, 2021, 1:20 PM UTC

yawaworht1978 wrote: post #279

traceroute66 wrote: post #107

Earlier quoted context omitted.

> spending time in South Kensington - walking back to hotel at night, only about 30% of houses had any lights on. South Kensington is a bit of a curiosity. It is predominantly bordered by Chelsea and Knightsbridge. Chelsea is Russian country, if you are a wealthy Russian, Chelsea is the place to be. Unless you are a Russian oligarch, in which case there are one or two spots a bit further away where you can splash sup…

What about Notting hill, a bedsit can go for 2000 quid per week there, it's in Kensington. Average London rent prices are 1600 quid, that is before council tax, internet and the dreaded tv licence. A more granular overview is Location Studio One bedroom Kensington and Chelsea £1,427 £2,062 Islington £1,383 £1,565 Tower Hamlets £1,398 £1,547 Westminster £1,371 £2,113 Lambeth £1,240 £1,595 One bedroom is not sufficient…

> its really bad in all London

I don't disagree with you there.

Aside from the Chelsea and Knightsbridge style stories, overall London suffers from a problem of (a) too much buy-to-let nonsense going on (b) off-plan new-build developments which are sold off-plan predominantly to offshore buyers (mostly Chinese using it as a way to get chunks of money out of China, but also other nationalities too). All those new-builds South of the River for example, almost exclusively off-plan jobs.

The present government is not helping either. They are unashamedly on the side of the property developers out there to make a quick buck, not Londoners.

I absolutely do feel for those on low / minimum wage in London who are pushed out of the market and having to face horrible commutes to be able to live somewhere remotely affordable.

Re: Dutch cities want to ban property investors in all neighborhoods

#319

Post by pydry » Sun, Sep 05, 2021, 1:21 PM UTC

taffer wrote: post #199

pydry wrote: post #156

Earlier quoted context omitted.

Or you buy an apartment in a high rise and share the cost with the other residents. It would certainly discourage the building of houses in the city centre.

> It would certainly discourage the building of houses in the city centre. No, that's not how it works. The value of a property is made up of the value of the land and the value of the buildings on it. If one of these two components is taxed, its value is reduced. However, it is important to remember that the supply of land is fixed, but the supply of buildings is not. If one taxes buildings, as is the case with a tr…

That's essentially my point. A house in the city center which consumes the same amount of land as an apartment block would face the same tax bill.

Who would want that house with that tax bill?

Re: Dutch cities want to ban property investors in all neighborhoods

#320

Post by IkmoIkmo » Sun, Sep 05, 2021, 1:23 PM UTC

dmje wrote: post #25

Amen to this. Two case studies from the UK I've been thinking about recently: 1) Visiting London and spending time in South Kensington - walking back to hotel at night, only about 30% of houses had any lights on. Suggestion is the others are effectively uninhabited, and a search on RightMove shows properties sell for £20-£30m for a 4/5 bed. This isn't normal Londoners, it's outside investment. 2) Cornwall, where I li…

Not sure why the amen is applicable to Dutch cities. I'll take the local perspective from Amsterdam as an example, but it applies more broadly to the other cities as well here.

Regarding point 1:

There's no real issues with long-term vacancies (the municipality already has laws in-place which fine owners of vacant homes), typically sits between 1 and 2%. That should obviously go down to 0 as much as possible, but it's clear that (1) the problem has an extremely minor effect on the market, (2) it's not exclusively caused by investors, a lot of them are pied-a-terres or homes owned by temporary migrants working abroad and (3) the problem of vacant homes that can be attributed to investors, can be addressed in many other ways than a total ban.

In other words, not an effective or suitable policy on this point.

Regarding point 2:

The price increases aren't caused by investors in Amsterdam, studies have shown this over and over again. If buy-to-let is banned, rental supply drops, rental prices go in overdrive, and there'll be more pressure to buy under any circumstance. The have-nots who're unable to buy will be even worse off. There's no magical panacea to a lack of sufficient supply.

You mention a couple points around 2nd homes, which are fair. I think in a world where there isn't enough housing for everyone, we should at minimum disincentivize owning second homes that go unused most of the time. But apart from the fact that Amsterdam is the capital, a working town, not a place where people have second homes that they enjoy on the weekend, this policy doesn't address 2nd homes at all. You're not banned from buying and owning a 2nd home in Amsterdam after this policy goes into effect.

In other words, an entirely ineffective policy regarding point 2.