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Houses are for living, not for speculation

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Re: Houses are for living, not for speculation

#121

Post by bpt3 »

kelipso wrote: post #111
empath75 wrote: post #63

People want to exempt housing from the laws of supply and demand. The reason real estate is expensive is that there is not enough housing available for everyone to own a house that wants a house. If we want inexpensive housing, we need a massive project in this country to build housing. There is no other way to fix it. There is no way to shuffle around ownership of existing housing stock that is going to magically ma…

Pretty sure there are plenty of houses sitting empty or as holiday rentals. Second homes, airbnbs, etc. Those could be simply banned or highly taxed and the shuffling of ownership would happen naturally.

You're "pretty sure"?

All data would indicate otherwise, and why shouldn't short term rental or vacation properties exist?

Re: Houses are for living, not for speculation

#123

Post by kelipso »

bpt3 wrote: post #121
kelipso wrote: post #111

Earlier quoted context omitted.

Pretty sure there are plenty of houses sitting empty or as holiday rentals. Second homes, airbnbs, etc. Those could be simply banned or highly taxed and the shuffling of ownership would happen naturally.

You're "pretty sure"? All data would indicate otherwise, and why shouldn't short term rental or vacation properties exist?

I know there is data that if you compare short term rentals to houses on sale, the rentals are a very large percentage, like more than 30%, in big cities. More than enough to significantly influence house prices (to be higher). Which is why short term rentals and vacation properties should be relegated to commercial properties only.

Re: Houses are for living, not for speculation

#124

Post by kelipso »

bpt3 wrote: post #120
kelipso wrote: post #119

Earlier quoted context omitted.

Put a few mile ring around any city center and yes the land there is scarce. You would not want one or a small number of individuals buying up all or a lot of that land because other people want to live there too. Therefore do exponential taxation based on land they already own. Why is this confusing to you?

For one, you're solving a non-problem in the US and creating new problems. Why do you think people are hoarding land today that could be used for housing developments and leaving it empty? What is "too much" land that would subject it to your exponential taxation?

There are a large number of properties in big cities sitting empty due to people hoarding land/houses. Too much is anything more than your primary residence. It should be taxed exponentially with both number of secondary residences and size normalized to urban development around the property.

Re: Houses are for living, not for speculation

#125

Post by flowerthoughts »

bpt3 wrote: post #64
flowerthoughts wrote: post #52

Earlier quoted context omitted.

Or unoccupancy tax. Forcing landlords to let at the price renters are willing to give will probably do some to reduce rent levels. Same goes for commercial, but in that case, I'd even suggest forefeiture if you are not reducing requested rent within a year of vacancy. Let someone else take over if you overspent.

Where does this misguided theory that there are vacant homes in desirable areas come from? All data indicates it's not the case, as well as common sense.

Fair question.

For homes, I don't know if there are. But I think taxes should be levied in line with incentives. If you place a wealth tax on property ownership, the only tangible thing that will happen is rents going up to offset. Since the tax applies to all landlords, it will be the closest thing to rent inflation.

What you really want to avoid is homes built but sitting empty. Whether that's a builder who can't sell at asking price, or a landlord not getting the rent they want doesn't matter. If the city sold a lot to you, they did so for improving home supply, not the developer's profits.

For commercial, my opinion was based on Louis Rossman's YouTube channel about New York. The hypothesis there is that loans are based on property value, which are tied to requested rent. Asking for a lower rent might mean they have to put up more collateral, which they can't. So they keep asking for high rates and leave it vacant.

Re: Houses are for living, not for speculation

#126

Post by croon »

energy123 wrote: post #11
xtracto wrote: post #3

I wholeheartedly agree with this. My opinion is that governments should tax 2nd, 3rd and further housing so as to prevent people from accumulating residential buildings. If you want to live of your rents, buy a commercial or industrial building, speculate with that. But residential construction should be protected to ensure each household is able to buy one with the average country salary.

A bad idea in isolation, because it forces people to store all their net worth into their main tax free house, causing people to squat in gigantic houses that they don't need or want. I've seen this distorted behavior in people I know. We should reward the person who lives in a normal house below their means, and buys an apartment as an investment (which is private capital into new construction that wouldn't have hap…

Your entire argument rests on housing being a speculative investment. The thread is about envisioning a scenario where that isn't the case.

If someone lives in a modest house and have further assets, there are many many (speculative) stores for that net worth that isn't housing.

Re: Houses are for living, not for speculation

#127

Post by bpt3 »

kelipso wrote: post #124
bpt3 wrote: post #120

Earlier quoted context omitted.

For one, you're solving a non-problem in the US and creating new problems. Why do you think people are hoarding land today that could be used for housing developments and leaving it empty? What is "too much" land that would subject it to your exponential taxation?

There are a large number of properties in big cities sitting empty due to people hoarding land/houses. Too much is anything more than your primary residence. It should be taxed exponentially with both number of secondary residences and size normalized to urban development around the property.

Cities in vacation spots have vacant homes, but most "big cities" do not, and vacation homes are not an example of hoarding.

In short, you're just making things up. I'm glad you aren't in charge, though there are a concerning number of people with your mindset.

Re: Houses are for living, not for speculation

#128

Post by empath75 »

kelipso wrote: post #111
empath75 wrote: post #63

People want to exempt housing from the laws of supply and demand. The reason real estate is expensive is that there is not enough housing available for everyone to own a house that wants a house. If we want inexpensive housing, we need a massive project in this country to build housing. There is no other way to fix it. There is no way to shuffle around ownership of existing housing stock that is going to magically ma…

Pretty sure there are plenty of houses sitting empty or as holiday rentals. Second homes, airbnbs, etc. Those could be simply banned or highly taxed and the shuffling of ownership would happen naturally.

That's an argument about land usage and not land ownership. There are plenty of short term rentals run by individuals, and if you banned corporate ownership of short term rentals and kept the other incentives the same, more individuals would just play in that space.

The other problem is this, if you banned short term rentals _entirely_, which NYC basically did, you have not changed the fundamental supply vs demand structure. You still have X people who want units and Y units. Rents did not go down _at all_. House prices did not go down _at all_. The primary change was that hotel prices went up because of lack of competition.

Re: Houses are for living, not for speculation

#129

Post by bpt3 »

flowerthoughts wrote: post #125
bpt3 wrote: post #64

Earlier quoted context omitted.

Where does this misguided theory that there are vacant homes in desirable areas come from? All data indicates it's not the case, as well as common sense.

Fair question. For homes, I don't know if there are. But I think taxes should be levied in line with incentives. If you place a wealth tax on property ownership, the only tangible thing that will happen is rents going up to offset. Since the tax applies to all landlords, it will be the closest thing to rent inflation. What you really want to avoid is homes built but sitting empty. Whether that's a builder who can't s…

> For homes, I don't know if there are.

Generally, there aren't any meaningful number of completely vacant homes in desirable areas in major cities. The caveats are there for cities like Miami where there are a significant number of second homes, cities like Detroit and Baltimore that have failed in some sense and experienced major population loss at some point, and rural areas that also have been experiencing population loss for some time.

I don't have a problem with vacation homes and most Americans don't seem to either, but if you do, okay.

The areas with declining population aren't really relevant to the discussion IMO, other than it's cheap housing that exists as a counterpoint to the people who claim no cheap housing exists.

> But I think taxes should be levied in line with incentives. If you place a wealth tax on property ownership, the only tangible thing that will happen is rents going up to offset. Since the tax applies to all landlords, it will be the closest thing to rent inflation.

I agree.

> What you really want to avoid is homes built but sitting empty. Whether that's a builder who can't sell at asking price, or a landlord not getting the rent they want doesn't matter.

Sure, but that's not a problem today. Builders aren't sitting on homes for extended periods of time, and landlords aren't leaving units empty for extended periods of time either. They are already disincentivized from doing so by existing carrying costs, so they don't.

> If the city sold a lot to you, they did so for improving home supply, not the developer's profits.

They presumably did it to generate revenue for the city, though there isn't much buildable city-owned land in most municipalities.

> For commercial, my opinion was based on Louis Rossman's YouTube channel about New York. The hypothesis there is that loans are based on property value, which are tied to requested rent. Asking for a lower rent might mean they have to put up more collateral, which they can't. So they keep asking for high rates and leave it vacant.

The commercial market is completely different than residential. Loan durations are shorter, terms are different, and there are many other factors that differ.

That analysis can't be applied to the residential market.

Re: Houses are for living, not for speculation

#130

Post by kelipso »

empath75 wrote: post #128
kelipso wrote: post #111

Earlier quoted context omitted.

Pretty sure there are plenty of houses sitting empty or as holiday rentals. Second homes, airbnbs, etc. Those could be simply banned or highly taxed and the shuffling of ownership would happen naturally.

That's an argument about land usage and not land ownership. There are plenty of short term rentals run by individuals, and if you banned corporate ownership of short term rentals and kept the other incentives the same, more individuals would just play in that space. The other problem is this, if you banned short term rentals _entirely_, which NYC basically did, you have not changed the fundamental supply vs demand st…

By banning short term rentals of residential properties, you move short term rental demand from residential to commercial market. Which does change the supply and demand for each market.

Seems like for NYC, it worked as expected with the increasing hotel prices. And didn’t work as expected for rentals. The next step now would be to ask why it didn’t work as expected for rentals while it worked as expected for hotels, not just concluding that the ban wouldn’t work.

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