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MIT 11.350: Sustainable Real Estate

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Re: MIT 11.350: Sustainable Real Estate

#31

Post by worstspotgain »

This is a difficult conversation to have, and not unintentionally so. I hope I come across as respectful and unpatronizing as possible (and apologize since I probably don't.)

While we have intelligent people discussing pie-in-the-sky solutions, barely-related tangential issues, and even misdirected injection attacks, the causes of the housing crisis are not only well-known to (honest) economists [1], but can be verified by looking at the market pre- and post-1970.

It's hard enough to tune in to the correct analysis in the cacophony. When once in a blue moon it comes from the bully pulpit [2], it still gets shot down in a sea of misdirection.

[1] https://archive.nytimes.com/krugman.blogs.nytimes.com/2017/0...

[2] https://www.politico.com/story/2016/09/obama-takes-on-zoning...

Re: MIT 11.350: Sustainable Real Estate

#32

Post by lotsofpulp »

JumpCrisscross wrote: post #27
hahahacorn wrote: post #5

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…

I don’t see how those are trivially worked around in a country with a half decent government.

People are not just going to give their relatives title to their property. LLC’s can be required to name the beneficial owner.

The rent-to-own lease farce can also be trivially uncovered by requiring rents to be public, like real estate sales are in most jurisdictions.

Re: MIT 11.350: Sustainable Real Estate

#33

Post by majormajor »

JumpCrisscross wrote: post #27
hahahacorn wrote: post #5

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…

I.e. "we don't want to."

We could require more disclosures and auditing and regulations of those workarounds. It's not some digital thing that could be hidden anywhere, it's trivially easy to monitor or seize real property.

Re: MIT 11.350: Sustainable Real Estate

#34

Post by georgeburdell »

jeffparsons wrote: post #17
charlie0 wrote: post #7

Earlier quoted context omitted.

Trusts. It's relatively easy to hide who owns what.

This is solvable. If a trust owns the property, default to the highest tax rate. The trustee is then responsible for providing proof of the beneficial owner(s) if they want the "discount" rate.

This is basically how income tax law works for trusts. The highest tax bracket is reached very quickly to quash the first order shenanigans that might result from more preferential treatment

Re: MIT 11.350: Sustainable Real Estate

#35

Post by pixelatedindex »

kredd wrote: post #9
hahahacorn wrote: post #5

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…

Not sure how it's down there, but my understanding is even if we have housing crisis, legislations that would actually bring down the housing prices is also bad for us. RE market is about 10%+ of the entire GDP, so we want individuals to park their money and use it as an investment vehicle as a part of the consumption cycle. Combine it with "i'll just buy it for my child/spouse/mom/dad" and so on, it's not really tha…

> RE market is about 10%+ of the entire GDP, so we want individuals to park their money and use it as an investment vehicle as a part of the consumption cycle.

Hard no, that’s how we got here. When it’s part of the investment cycle, developers won’t build or build only ones that maximize profits, NIMBYism thrives, and it makes it so that the only people able to buy are the ones who least need it.

If you have enough money to buy a __house__ for someone else, then you have enough money to pay much higher taxes. This isn’t like buying a car for someone.

Btw, the GDP contribution is about 18% [1] due to price being propped by extensive construction on the supply side. This is by design, and we shouldn’t be encouraging it.

[1] https://www.nahb.org/news-and-economics/housing-economics/ho...

Re: MIT 11.350: Sustainable Real Estate

#36

Post by JumpCrisscross »

lotsofpulp wrote: post #32
JumpCrisscross wrote: post #27

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…

I don’t see how those are trivially worked around in a country with a half decent government. People are not just going to give their relatives title to their property. LLC’s can be required to name the beneficial owner. The rent-to-own lease farce can also be trivially uncovered by requiring rents to be public, like real estate sales are in most jurisdictions.

> don’t see how those are trivially worked around in a country with a half decent government

Look at how people abuse rent controlled apartments. (All the way up to the current mayor.)

> People are not just going to give their relatives title to their property

This is literally what happens in places with such taxes. I wouldn’t bat an eye buying a house in my partner or a parent’s name if it saved 3x property taxes.

Re: MIT 11.350: Sustainable Real Estate

#37

Post by kredd »

t-writescode wrote: post #12
kredd wrote: post #9

Earlier quoted context omitted.

Not sure how it's down there, but my understanding is even if we have housing crisis, legislations that would actually bring down the housing prices is also bad for us. RE market is about 10%+ of the entire GDP, so we want individuals to park their money and use it as an investment vehicle as a part of the consumption cycle. Combine it with "i'll just buy it for my child/spouse/mom/dad" and so on, it's not really tha…

> 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 entirely sure how that would pan out in the west.

Re: MIT 11.350: Sustainable Real Estate

#38

Post by JumpCrisscross »

majormajor wrote: post #33
JumpCrisscross wrote: post #27

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…

I.e. "we don't want to." We could require more disclosures and auditing and regulations of those workarounds. It's not some digital thing that could be hidden anywhere, it's trivially easy to monitor or seize real property.

> it's trivially easy to monitor or seize real property

Anyone who owns property should be horrified at the notion of making it “trivially easy” to seize real property. That turns this into electoral toast. Its only utility is in distracting from zoning reform.

Also, the homeownership rate is 65% [1]. Second homeowners aren’t the problem.

[1] https://fred.stlouisfed.org/series/RHORUSQ156N

Re: MIT 11.350: Sustainable Real Estate

#39

Post by ehfeng »

eurleif wrote: post #21
ehfeng wrote: post #15

Earlier quoted context omitted.

I disagree with your "natural" person qualification. "Non-natural persons" includes anyone with a work visa or green card. It's hard enough for most people to get these, much less become fully naturalized citizens. Plus, the waiting time isn't guaranteed in length: it's variable based on the political climate. It's hard enough for immigrants today. Making the viability of home ownership based on political whims only…

"Natural" and "naturalized" do not refer to the same concept. "Natural person" includes those with work visas or green cards. >A natural person is a living human being. Legal systems can attach rights and duties to natural persons without their express consent. >The concept of a natural person appears in business law and bankruptcy law, where it provides a contrast with an artificial person or a legal person which is…

Got it thanks

Re: MIT 11.350: Sustainable Real Estate

#40

Post by pixelatedindex »

JumpCrisscross wrote: post #38
majormajor wrote: post #33

Earlier quoted context omitted.

I.e. "we don't want to." We could require more disclosures and auditing and regulations of those workarounds. It's not some digital thing that could be hidden anywhere, it's trivially easy to monitor or seize real property.

> it's trivially easy to monitor or seize real property Anyone who owns property should be horrified at the notion of making it “trivially easy” to seize real property. That turns this into electoral toast. Its only utility is in distracting from zoning reform. Also, the homeownership rate is 65% [1]. Second homeowners aren’t the problem. [1] https://fred.stlouisfed.org/series/RHORUSQ156N

> (Also, homeownership is 65% [1]. Second homeowners aren’t the problem.)

Is there a breakdown on what portion of this 65% own multiple homes? Personally, I’m not a fan of anyone who has more than 2 homes. One primary and one vacation or rental. Why does anyone need more than that?

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