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Barcelona Fines Landlords Who Let Buildings Sit Empty

citylab.com

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Re: Barcelona Fines Landlords Who Let Buildings Sit Empty

#221

Post by okr »

kabacha wrote: post #202
crazygringo wrote: post #201

In this conversation, it seems like people ignore the fact that there's a societal benefit to leaving buildings empty, at least in economic theory. Which is that it's keeping the space open for more productive use in the long term. Suppose you own a storefront or apartment that could fetch $5K/month right now, but you think it will fetch $10K/month in 3 years, and that leases are 10 years long. Well, the people/busin…

Your anecdote covers business leasing when the article discusses housing. Surely having a flat sit empty for years while people don't have any place to live in is a problem, right? Obviously there's an economic incentive here (why else would anyone leave the apartments empty?) but it just doesn't mean it's not a problem for the cities and their citizens.

I like the future availability argument. It's a good function.

But i also can see, why citizens (if we talk about housing) might object, if there is no affordable housing right now, if everyone were betting.

But then again, if i look at prizing over the last 100 years, and if citizens back then would have to look at prizes today, they would be outraged or at least be worried about their offspring. While, when one is working today and does not have to live in popular areas, in my anecdotal experience, many do pretty ok.

Re: Barcelona Fines Landlords Who Let Buildings Sit Empty

#222

Post by kijin »

okr wrote: post #218
kabacha wrote: post #205

I live in one of such buildings in Thailand and I love it! I live in 30 store high new condo that is pretty much bought out by chinese investors and few seasonal tourists. There are probably 200 people living here and on my floor I have 1 neighbour. There's a pool, sauna and a gym in the building and with so few inhabitants you often have it all somewhat private. As an expat I definitely benefit from this. I've tried…

Is this not spooky? No noises? The drops of water somewhere? And you always start to wonder who this might be, who landed at my floor with the elevator? It actually triggers one of my childhood dreams. To be alone in a skyscraper. :)

You are Bruce Willis. You are alone in a skyscraper, except for a bunch of terrorists and their hostages all rounded up on the top floor.

That doesn't sound like my childhood dream, but it sure sounds like a fun Hollywood flick. :)

Re: Barcelona Fines Landlords Who Let Buildings Sit Empty

#223

Post by okr »

conanbatt wrote: post #214
crazygringo wrote: post #201

In this conversation, it seems like people ignore the fact that there's a societal benefit to leaving buildings empty, at least in economic theory. Which is that it's keeping the space open for more productive use in the long term. Suppose you own a storefront or apartment that could fetch $5K/month right now, but you think it will fetch $10K/month in 3 years, and that leases are 10 years long. Well, the people/busin…

This is a bonkers line of argumentation. Speculation is not a productive activity. It is also potentially very destructive. A different argument would be to say that the seller of the property is putting the money to better use, but nevertheless speculation of land, particularly in big cities, is purely a legal issue and regulatory capture. Change taxes to LVT and watch them dissapear.

I am surprised to read on YC news, that speculation is not a productive activity.

Is not the whole venturing idea an organized risk minimizing speculation adventure? I do not think anyone willingly spends part of their wealth into something, that they don't think, it's worth investing in.

And i also think it is worth noting, that if there was then a future gain, that it had produced something, that others were willing to spend money on. So it must have been useful?

Re: Barcelona Fines Landlords Who Let Buildings Sit Empty

#224

Post by Neil44 »

akulbe wrote: post #127

It doesn't make sense to me why they'd WANT to leave them empty?? If I were a landlord, I'd be doing my best to keep the rentals occupied as much as possible.

The value of the property is based on its rentable value so if the landlord drops the rent to get a tenant in they immediately take a big loss on the value.

Re: Barcelona Fines Landlords Who Let Buildings Sit Empty

#225

Post by l4yao »

parthdesai wrote: post #171
l4yao wrote: post #136

Earlier quoted context omitted.

I think it's reasonable to assume Airbnb reduces supply. I don't see how you can conclude the 30% rent increase you experienced was largely driven by Airbnb. Lets say anyone renting out their unit for less than half a year wouldn't have put the unit on the rental market anyways. If you download and dive into the data, you'll see that there are ~9550 "Entire home/apt" listings, of which 5992 are available for less tha…

First of all, appreciate the level headed discussion and some very sound points that you bring. I dug through insideairbnb more and it's actually 12,374 (65%) units that are listed as entire unit in Toronto. That absolutely is a very significant amount of units. Only about 7k of the listings are either shared room/private room. Data: http://insideairbnb.com/toronto/?neighbourhood=&filterEntire... > Lets say anyone re…

>it's actually 12,374 (65%) units that are listed as entire unit

I had filtered out the 3300 "Entire home/apt" listings that were available for 0 days a year. Not sure why it's part of the dataset, but I assume it's for people with previously active listings.

I'm not really understanding the mortgage point, but you bring up an interesting point of treating "multi-listing" hosts as bad actors. If we approximate it by saying 45% of 9550 are bad actors, that's still only 4300 listing. That's still tiny relative to the Toronto rental market. To be fair, the realistic number could be a lot lower since a multi-listing host might be hosting multiple bedrooms in a single house and inflating the # of multi-listing hosts, or they might be hosting their primary residence and an investment property where only the investment property is a bad actor.

>You say it's negligible but you have to remember that we have one of the lowest vacancy rates.

I don't deny that Airbnb has an adverse affect on rent prices, but it appears to be quite small relative to other levers affecting the housing crisis. I wonder if a study may exist that shows the economic benefits of Airbnb in communities, keeping more of the income within local residents, patronage to a larger spread of local businesses, greater financial independence from self-employment etc...

>just go on r/toronto

I'm pretty active in the community, but less and less these days. It's become a major echo chamber where fact based level headed discussion is quickly down voted if the rhetoric doesn't fit the majority's views. Just look at the comments the next time Airbnb is brought up :). In all seriousness, having an overwhelming majority of people agreeing with you isn't always indicative of "being correct". For any viewpoint, there's probably an active internet community out there that feels strongly one way. Take r/the_donald or r/The_Mueller/ for example.

Re: Barcelona Fines Landlords Who Let Buildings Sit Empty

#226

Post by robocat »

crazygringo wrote: post #201

In this conversation, it seems like people ignore the fact that there's a societal benefit to leaving buildings empty, at least in economic theory. Which is that it's keeping the space open for more productive use in the long term. Suppose you own a storefront or apartment that could fetch $5K/month right now, but you think it will fetch $10K/month in 3 years, and that leases are 10 years long. Well, the people/busin…

No one is forcing the landlord to have a 10 year lease. They can lower the lease and have a short notice period.

Now they get 3 years of some rent followed by 7 years of double rent.

Re: Barcelona Fines Landlords Who Let Buildings Sit Empty

#227

Post by lalos »

kabacha wrote: post #205

I live in one of such buildings in Thailand and I love it! I live in 30 store high new condo that is pretty much bought out by chinese investors and few seasonal tourists. There are probably 200 people living here and on my floor I have 1 neighbour. There's a pool, sauna and a gym in the building and with so few inhabitants you often have it all somewhat private. As an expat I definitely benefit from this. I've tried…

Of course, you benefit from empty shared spaces and the investors benefit of parking their money in a safe investment. The thing here is that this is supply that could lower the price for the population if you incentivize investors to rent and tries to not benefit only a select few.

Re: Barcelona Fines Landlords Who Let Buildings Sit Empty

#228

Post by toast0 »

hn_throwaway_99 wrote: post #174
smnrchrds wrote: post #120

Earlier quoted context omitted.

In general, municipalities are not allowed to run a deficit in Canada. Since high taxes which would result in having a surplus are politically unpopular, usually municipalities get just enough tax to fund their programs. That is when they are writing their annual budget, they define their total expenditure E, the total assessed value of all properties within their municipality V, and set the tax rate for the year by…

Wow, thanks for this, I did not know this and now it makes much more sense as to why international investors saw Vancouver real estate as a piggy bank. In Texas many localities have property taxes of about 2.5% (though no state income tax). I wish places would do graduated property taxes - I don't know of any place that does that (with the exception of relatively meager homestead exemptions and a few "mansion taxes")…

I like the idea, but I think you would end up with many lots getting subdivided so that more of their tax would be at lower rates. And then the small lots cause logistical issues later.

Re: Barcelona Fines Landlords Who Let Buildings Sit Empty

#229

Post by em500 »

conanbatt wrote: post #182
refurb wrote: post #176

Earlier quoted context omitted.

In places with rent control, having a tenant reduces the value of the home. Sometime substantially if their rent is locked at a low rate. It’s not unusual to buy tenants out in SF before putting the home on the market. Spend $50k to get them to leave and the value of the home goes up $200k. If you know you’re going to sell in a few years, basically the value of the rent (adjusting for buyout) is way less than the inc…

Then the problem is rent control, and the solution is not to tax empty homes.

It can also happen without rent control but due to other pro-tenant laws. For instance, in some countries landlords cannot terminate the rental contract unless the tenant is in serious arrears. This depresses the market value of a rented house, as the buyer can't live in in his newly purchased house if it's already rented out.

Re: Barcelona Fines Landlords Who Let Buildings Sit Empty

#230

Post by christkv »

I would like to see this in my city center (Oviedo, Spain) but for another reason. Commercial store front is sitting empty and rents are not getting lowered to match the demand. I suspect it's due to funds or banks owning the property and not caring. However for the city itself this is bad as it hinders new economic activity as well potentially leaves blight in the near future.
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