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Ask HN: Anyone else feels the commoditization of real estate is unethical?

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Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?

#641

Post by toss1 »

drBonkers wrote: post #347
toss1 wrote: post #248

Earlier quoted context omitted.

That will merely increase the carrying cost of the land and ensure that only rich people can live there, and that's true even if you break it up into smaller units on each unit of land, it's just higher cost smaller units. There is NO one single point of influence that works the way we want it to, and that starts right at the 2nd-order effects, not even tertiary effects.

What is the difference between 2nd-order and tertiary effects?

My understanding is that it is the next level of knock-on effect.

So, maybe an example of turning on & engaging the motor of a boat on a lake would be the primary effect is the boat accelerates, the secondary effect is the wave/wake created, and the tertiary effect is the wake bouncing other boats and it's effects on shore.

So with this land tax example, the primary effect of the tax is increased revenues for the city and costs for the landholders, the secondary effect would be restring ownership/renters to a wealthier set of people, and the tertiary effect might be changes in the mix of transportation used like more private cars and less public transport...

Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?

#642

Post by [deleted] »

danielheath wrote: post #86
bennysomething wrote: post #49

Earlier quoted context omitted.

But how would you tackle it without making the problem worse?

A high land value tax moves the problem around (instead of young people not being able to buy a house, older folk can't afford to keep the large one they spent their lives in). In the process, it makes land completely unappealing to rent-seekers while incentivizing high-density development of desirable locations.

[deleted]

Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?

#643

Post by jjav »

ItsMonkk wrote: post #424
nrmitchi wrote: post #389

Earlier quoted context omitted.

"Taxes have no effect on what the renter pays"; by this I assume you mean "market rate is market rate regardless of cost". Sure, to a point. The tax situation of my individual property does not impact the market rate. Just like how the market rate does not change if there is a mortgage on a property, or paid-in-full. If the entire market is faced by a new tax all at once, you will see rents rise. Costs across the boa…

No. Renters are paying for the value of the land and the improvements. If the rental price of the apartment is above that, they won't pay it and find another place. If there are no places they will go homeless. Since landlords are already charging for this value, an increase of taxes does not increase the rents. > every property owner isn't going to operate at a loss So they will then sell. But who would buy at curre…

> Since landlords are already charging for this value, an increase of taxes does not increase the rents.

This seems to assume that a rental property is forever a rental property and will continue to be rented at market price no matter what.

But that's not true. It's only a rental property if the owner can rent it out and not be losing money. If the conditions change (like taxes on it) so that's it can no longer be profitable, it is taken off the rental market (most likely by selling to someone who wants to live in it).

If that's one unit, no problem, the renter can go elsewhere. In the proposal being discussed where all rental units have a 4x tax increase, this applies to all rental units at once. Rent prices go way up and most rental units disappear from the market.

Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?

#644

Post by drinkzya »

AYBABTME wrote: post #508
rojobuffalo wrote: post #257

Earlier quoted context omitted.

I would start by making property taxes substantially higher for non-owner-occupied property. If you are rent-seeking rather than residing on the property you should pay way more, maybe 4x or higher, in taxes. Housing prices would crash and that would be the point; but everyone who owns property would be against it because they don't want to see their assets drop in value. The counter-argument people make is "that wou…

This falls flat on its head when you consider that this would force a bunch of people in becoming small time landlords, with the inability to invest in their skills and competency by scaling up to multiple properties. Barely anyone would be interested in running multi-family real estate and they would migrate to commercial real estate. What would remain for residential is low density condos and shitty small time land…

Why isn't there a downvote button? Such an agenda.

Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?

#645

Post by andrepd »

prvit wrote: post #315
andrepd wrote: post #105

Earlier quoted context omitted.

How can renting from a middleman who owns it be possibly cheaper than owning it directly? Unless the middleman is a charity which rents at a loss.

Middleman maintaining 100 apartments can do so for less money per unit than the guy maintaining a single apartment.

Why can't the owner pay a company to deal with that? You are conflating the part of the remuneration for the landlord that has to do with actual services rendered, with the part that simply has to do with the monopoly on capital rights.

Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?

#646

Post by jefftk »

_8j50 wrote: post #542
jefftk wrote: post #489

Earlier quoted context omitted.

In your proposal the 'flipper' owns the house for 20 years, which is a completely different model and makes standard flipping uneconomical

That wouldn't be flipping just a side-effect of ownership. Flippers should provide renovation/real-estate as a service with the original owner maintaining ownership until the sale to someone else.

> Flippers should provide renovation/real-estate as a service

That's a general contractor, not a flipper. The key difference is who takes on the risk: if I hire a general contractor and they turn out to be not very good at their job, that's my problem.

Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?

#647

Post by dominotw »

djohnston wrote: post #602
prvit wrote: post #318

Earlier quoted context omitted.

Surely it's the other way around. The renter has far more freedom, they can easily pack up their things and go. The renter has also has far fewer responsibilities than the owner.

They would still need to complete their lease or pay the penalty, I dont think 'easily' is the appropriate adverb. Besides homeowners can also do this, it's called selling your home, people do it all the time albeit with a bit more paperwork than the renter. The lack of freedom derives not from imaginary mobility constraints, but from the provision of shelter coming from a 3rd party landlord. Your roof is resting on…

> whims of a profit motive for someone who owes you nothing.

what whims? I have a lease for X months. Yes all bets are off after that. No one is acting on whims.

Homeowners are also at the whims of cost of labor to make essential repairs , cost of necessary appliances , property tax increases, employment opportunities near your home if you lose your job and whims of the banks that can foreclose your home.

Nothing in life is a guarantee . Owing mortgage payments to a bank vs renting isn't more freedom. Renters can become homeowners if they want and homeowners are forced to become renters ( remember 2009 ) . So i don't really understand what 'freedom' being a homeowner gives you. Your financial status give you freedom not your home ownership status.

Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?

#648

Post by drdec »

carapace wrote: post #447
drdec wrote: post #305

Earlier quoted context omitted.

> It's something that turns a basic necessity into a speculative asset The solution to that is the same as the housing problem - build more housing. And it's fine if the new housing is "luxury" housing - then yesterday's luxury housing becomes today's not-so-luxurious, etc.

In theory. What we see in practice (here in SF) is a glut of vacant luxury homes next to people living in RVs and tents. Belvedere Island (where Captain Kirk will one day live) is mostly empty. The fancy homes there are almost all investments, few people actually live there.

So build more housing.

Keep doing it until the problem goes away. It will eventually.

Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?

#649

Post by ItsMonkk »

jjav wrote: post #643
ItsMonkk wrote: post #424

Earlier quoted context omitted.

No. Renters are paying for the value of the land and the improvements. If the rental price of the apartment is above that, they won't pay it and find another place. If there are no places they will go homeless. Since landlords are already charging for this value, an increase of taxes does not increase the rents. > every property owner isn't going to operate at a loss So they will then sell. But who would buy at curre…

> Since landlords are already charging for this value, an increase of taxes does not increase the rents. This seems to assume that a rental property is forever a rental property and will continue to be rented at market price no matter what. But that's not true. It's only a rental property if the owner can rent it out and not be losing money. If the conditions change (like taxes on it) so that's it can no longer be pr…

Ah, this is true. Targeting a certain specific thing in a market will cause distortions.

This is why I am for the value of all land being taxed. No distortions.

Re: Ask HN: Anyone else feels the commoditization of real estate is unethical?

#650

Post by AYBABTME »

drinkzya wrote: post #644
AYBABTME wrote: post #508

Earlier quoted context omitted.

This falls flat on its head when you consider that this would force a bunch of people in becoming small time landlords, with the inability to invest in their skills and competency by scaling up to multiple properties. Barely anyone would be interested in running multi-family real estate and they would migrate to commercial real estate. What would remain for residential is low density condos and shitty small time land…

Why isn't there a downvote button? Such an agenda.

You're funny, I have no agenda. I'm a new owner of a triplex, always been a renter before, and we occupy one of the units. I'm just learning this as I go, but the economical dynamics are playing out in front of my eyes and I'm confused at the conflicting policies from local governments. Give me a chance and perhaps believe me if I say I just have honest and good intentions, and this is based on what I'm seeing as I explore this path? Or you can dehumanize me and pretend I'm some villain.
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