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MIT 11.350: Sustainable Real Estate

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71–80 of 137 posts

Re: MIT 11.350: Sustainable Real Estate

#71

Genuine Question, why can't we just charge a federal property tax 3-4x local property taxes for individuals who own >1 property (which would likely be distributed back to the locality, specifics not important), apply the same rules we do for pass-through taxation to mitigate loopholes, and automatically charge this elevated rate for properties owned by non-natural persons? I think this would just price in the externa…

This isn't a distribution problem. We don't have enough pie (houses). We need more houses. Not a campaign to distribute a massive shortage slightly more evenly.

There are more empty second homes than homeless people in my state. By a factor of 10.

It's a distribution problem.

Re: MIT 11.350: Sustainable Real Estate

#72

Genuine Question, why can't we just charge a federal property tax 3-4x local property taxes for individuals who own >1 property (which would likely be distributed back to the locality, specifics not important), apply the same rules we do for pass-through taxation to mitigate loopholes, and automatically charge this elevated rate for properties owned by non-natural persons? I think this would just price in the externa…

Because people making laws are not going to tax themselves and their friends.

You need a populist leader to achieve that, but, well, no one wants one I guess.

Re: MIT 11.350: Sustainable Real Estate

#73

Genuine Question, why can't we just charge a federal property tax 3-4x local property taxes for individuals who own >1 property (which would likely be distributed back to the locality, specifics not important), apply the same rules we do for pass-through taxation to mitigate loopholes, and automatically charge this elevated rate for properties owned by non-natural persons? I think this would just price in the externa…

> Genuine Question, why can't we just charge a federal property tax 3-4x local property taxes for individuals who own >1 property (which would likely be distributed back to the locality, specifics not important) I am that person. I own two duplexes in addition to my primary residence, for a total of four residential rental units – all 2/1s made up of ~750 sq ft each. Those additional properties that I own provide hou…

> Those additional properties that I own provide housing to 6 humans who can't purchase, or just prefer not to.

Of course you just ignore the fact that one of the reasons they can't purchase is because you're hoarding the damn houses.

You can't buy what isn't for sale.

Re: MIT 11.350: Sustainable Real Estate

#74

Earlier quoted context omitted.

Because most skyscrapers can't be converted to housing efficiently. It would cost more to convert them then you could sell the units for. The people who own those buildings are desperate to fill them. They'd convert if it made sense. They aren't part of some evil cabal to have commercial buildings sit empty to push up residential property prices.

Why is everyone (ok, fine, mostly economics & tech people) convinced this is such a wildly viable slam dunk of an idea? Have y'all ever opened up a wall before and seen the electrical, plumbing, etc mechanical bits that make up a home? Any idea of what it'd cost to chop up that office space and feed every individual piece the necessary bits? It's outrageous that we're even talking about this idea still. It'd require…

Houses are like a million dollars. Some plumbing is maybe 10k?

Re: MIT 11.350: Sustainable Real Estate

#75

Earlier quoted context omitted.

I’m sick of rent control being vilified. If you’re not going to build more then you definitely need it. I’ve had my rent go up as much as 20%, forcing me to move on more than one occasion. If Prop 13 keeps the grandma in their home, then why can’t I have rent control that lets me stay put and provide stability? Landlords will do the absolute minimum for repairs anyway, rent control or not.

> sick of rent control being vilified Not vilifying it. Saying that tracking who is the legal owner and beneficiary of a property is tough. Given the present market state, I wouldn’t be surprised if such a tax measure increased rents.

> Saying that tracking who is the legal owner and beneficiary of a property is tough.

That doesn’t pass the sniff test - the legal owner has to pay property taxes so why can’t they track it that way? If it’s a trust then it’s the beneficiaries that are the owners.

In the absence of rent control i can see landlords just forwarding the cost of taxes, but that’s where I’m a huge proponent of it. Discourage investing in homes unless you really have the capital

Re: MIT 11.350: Sustainable Real Estate

#76

Earlier quoted context omitted.

> Genuine Question, why can't we just charge a federal property tax 3-4x local property taxes for individuals who own >1 property (which would likely be distributed back to the locality, specifics not important) I am that person. I own two duplexes in addition to my primary residence, for a total of four residential rental units – all 2/1s made up of ~750 sq ft each. Those additional properties that I own provide hou…

> Those additional properties that I own provide housing to 6 humans who can't purchase, or just prefer not to. Of course you just ignore the fact that one of the reasons they can't purchase is because you're hoarding the damn houses. You can't buy what isn't for sale.

The problem is not that rents are too low and sales prices are too high, which might make it appropriate to punish renting a unit and force landlords to sell. The problem is too few of both rental and ownership units.

Re: MIT 11.350: Sustainable Real Estate

#77

Genuine Question, why can't we just charge a federal property tax 3-4x local property taxes for individuals who own >1 property (which would likely be distributed back to the locality, specifics not important), apply the same rules we do for pass-through taxation to mitigate loopholes, and automatically charge this elevated rate for properties owned by non-natural persons? I think this would just price in the externa…

> why can't we just charge a federal property tax 3-4x local property taxes for individuals who own >1 property Trivially worked around. Use an LLC. Have it bought in a relative’s name. Have it bought in a rando’s name with a bulletproof lease with a $1 rent-to-own option at its termination. Essentially, the property registry system becomes a farce. (You see this, for example, in India.) Simpler: a straight wealth ta…

Things are only "trivially worked around" if we let them be.

There is a concept you don't seem to be familiar with called "beneficial ownership". What this means is that if an LLC buys a house, a lot of jurisdictions require the "beneficial owner" to be known and to be taxed accordingly. The beneficial owner may not be on public records (the LLC will be) but the tax authorities will know.

Some jurisdictions don't do this or don't enforce it, which is a big part of why the London property market is the money laundering capital of the world [1].

So what would I like to see?

1. Eliminate the Mortgage Interest TAx Deduction. It's giving money to the wealthy;

2. Increase property taxes for any property owned by an LLC;

3. Require a beneficial owner to be recorded and maintained with tax authorities;

4. Treat any benefical owner or owner of any property in the state to be a tax resident of that state, which means their worldwide income is subject to the income taxes of that state;

5. In any sufficiently dense population area, single family housing ("SFH") zoning should be illegal;

6. A return to multi-family units as this is a class of housing that used to be really common but is now exceptionally rare. I'm fine with landlords to the extent that the landlord lives in the same property and suffers the same externalities from their tenant as their neighbours do. This includes AirBnB too;

7. Higher property taxes for SFHs that don't have an auxillary dwelling unit ("ADU") in any area where the median rent is above some threshold of the median income;

8. Do what Texas does with property taxes for Seniors: you can defer them until your death if you don't want to move. Otherwise you should downsize. We want to do the opposite of what California did with Prop 13 and pass massive tax breaks to Disney and wealthy landowners under the guise of "not kicking seniors out of their homes". In case you didn't know, the tax rate for Disneyland has basically remained unchanged since the 1960s thanks for Prop 13.

That's probably a good start but not egverything.

[1]: https://www.youtube.com/watch?v=gyk12Wf_TeQ

Re: MIT 11.350: Sustainable Real Estate

#78
post #2

We need to stop treating real restate--especially residential real estate--as a mechanism for creating wealth. there are enough homeowners that they vote for politicians and policies that will increase the value of their "investments". All this does is simply steal money from the next generation. Our entire economic system is designed to transfer wealth from the young and poor and the old and wealthy. There is a dist…

Yeah anytime the whole 'we already have enough houses' has been tested it has been found false. Demand in cities is constantly growing, and cities with green belts and all kinds of regulation simply can't expand. Total stock is irrelevant. The British solution if continued would also lead to rises as demand in cities grows.

> so the private sector simply can't manipulate hte market

They are not 'manipulating' the market, they simply have assets that are valuable because of high demand. You can only restrict supply if some other private developer can not simply buy land and build, and take that advantage away from you. If there was actually enough places to build, then the profit maximizing strategy is to build as many high value houses as fast as you can. And that's exactly how street car subburbs were built on mass. All these theories about how nothing is possible without defeating 'landlords' are just not true. Its the currently existing laws and regulation that set the board and people just play that game.

The reality is that we know the solution. We know that those places that build enough housing of the type demand by the market have lower rates, this has been proven over and over again.

In Britain Labor basically created a laws that made private house building much, much harder. They of course did this because they believed they would build lots of social housing. Of course because of money issues and their political downfall this didn't continue. But also off course, the laws restricting supply were not changed. So Labor and Tory both have a hand in the problem.

The problem are perfectly clear. Build more houses in places people want to live. It doesn't even matter if its social housing or private. I believe the market is perfectly capable of building the right kind of housing. But of course you can also do it with social housing. There are many ways to entourage more building. We need to stop making this about some political fight and simply look at the market basics.

In Houston Texas, the market did build many houses, and prices were comparatively low. But of course because of the type of regulation that still existed, this resulted mostly US style subburban sprawl. But I guess better then simply increasing prices. There is tons of other data that shows corroboration between house building and rents.

We don't have to totally re-imagine property rights law, we aren't gone abolish private property and renting isn't inherently bad. We simply need to create rules that make actual sense and provide the necessary infrastructure.

I'm not necessarily against some of the rules against landlords that you suggest, but we simply can't pretend that it is a solution by itself. The notion that all private ownership and renting is inherently hurtful is one of the biggest myths that's preventing any progress on this issue.

We know what to do, land-value tax, right-to-build, proper land-use planning, densification, take the space away from cars, transport oriented development. And this can be done entirely by the government if that your political bend.

> All this does is simply steal money from the next generation.

It actually enriches the next generation. We still have houses from the 16th century, still providing value for our community to this day.

Re: MIT 11.350: Sustainable Real Estate

#79
post #37

Earlier quoted context omitted.

> legislations that would actually bring down the housing prices is also bad for us Then perhaps we should make a 20 year rollout plan to help us adjust; but, individuals being able to live in a location for a consistent price and other improved social safety nets are a net positive for society and government is supposed to work *for* society as a whole, not just the elites

I’m a renter, and I would love that. That being said, majority of people in North America own their homes. Since looking at your property as an investment has been normalized, those voters wouldn’t really like that. Something similar is happening in China, where MoM the average housing is depreciating, and they’re trying hard to balance out the economy with incredible investments into manufacturing and tech. I’m not…

[deleted]

Re: MIT 11.350: Sustainable Real Estate

#80
post #77

Earlier quoted context omitted.

> why can't we just charge a federal property tax 3-4x local property taxes for individuals who own >1 property Trivially worked around. Use an LLC. Have it bought in a relative’s name. Have it bought in a rando’s name with a bulletproof lease with a $1 rent-to-own option at its termination. Essentially, the property registry system becomes a farce. (You see this, for example, in India.) Simpler: a straight wealth ta…

Things are only "trivially worked around" if we let them be. There is a concept you don't seem to be familiar with called "beneficial ownership". What this means is that if an LLC buys a house, a lot of jurisdictions require the "beneficial owner" to be known and to be taxed accordingly. The beneficial owner may not be on public records (the LLC will be) but the tax authorities will know. Some jurisdictions don't do…

> concept you don't seem to be familiar with called "beneficial ownership"

I own one house, my spouse the next, my mom the next and then we do kids.

Your other ideas are much better. Were I a NIMBY politician, I’d distract from them with this tax idea. (As a Wyoming homeowner I positively love No. 4. Presently, I pay taxes when owed in every state I work in.)

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