711–720 of 1001 posts
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In Queens and Brooklyn, before the Amazon NYC Headquarters was derailed, they had bus tours of Chinese investors, driving around, looking for for sale signs. It was crazy.
That has been very common for the last 30 years and AFAIK hasn't slowed down.
This hurts people who already own houses, too - property taxes are assessed on the appraised value of the home, which is a function of what the similarly-sized houses in your area sold for most recently. My property taxes have increased 10% every year for the past several years (and it would have been more if not for a legislative 10% annual cap). I worry that there will come a day when I've paid off my mortgage but…
Property taxes in most of america are a made up number. The county needs $X and levies Y% in property tax and the auditors use a formula to solve for $Z, which is the value of an individual home. This is exactly why, all over the country, you'll find houses that just sold for $500k which have an "appraised value" of like $120k. Property taxes are dictated by the size of $X, not really the value or volume of houses. S…
Except in States that have property tax and no income tax, the appraised value is close to the sale value, usually slightly under.
So in a 500k example, the appraised value is something like 450k (or more). Then your property tax might be 2% of that appraised value, which results in a $9,000 property tax bill every year, even when you retire.
If speculative buying drives up the price over 10 years, it also drives up the appraised value and also your tax bill
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> but we probably don't want to live in a communist country where the government owns every home and everyone is renting either. Yes, like the famously communist state of, checks notes , Singapore. Sorry for the snarky reply, but I don't think calling the breaking of monopoly power/taxing unearned rents is communism.
Is that how it works in Singapore? I know in China you lease land from the government for 50 or 100 years. I do think it's important to be open to ideas, and I think there probably ought to be redistribution of wealth, particularly when it comes to land ownership. That has to be balanced with some minimum set of rights so that people can't be randomly evicted because people in power want that land, and that when peop…
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Many NIMBYs aren't purely financially driven. What they want is for their neighborhood to stay exactly as it was when they moved in, with the same type of people, and same amount of traffic. Bay Area has plenty of this type. Many of them already have had property value skyrocket (50K -> 2M is not uncommon), so they can just have both (high property values, and preserve their neighborhood exactly as they want it).
Honestly I think this would be fine. The problem is they allow FANG to build giant offices, which brings new 400k-income jobs and bids up the restricted supply. I think they should be forced to choose one or the other. Keep their SFH and say no to FANG, or accept townhomes and condos to balance out the new jobs.
The problem (I think) is that the Fed has dumped too much money into the system. There are no assets left to buy at reasonable prices. So now investors are buying homes. This is the downside to the current "bailout". I think the last "bailout" was a bit more lean. People were hurt, but in different ways than they are today.
REITs have been doing this for a long time. It accelerated after 2008 because of the housing collapse which was triggered by Banks creating to much money rather than the Fed.
If only so many people didn't treat land and houses like investments, there wouldn't be such a disastrous hoarding problem. Henry George's Land Value Tax [1][2] seems like an obvious economic fix that would require a large fraction of the population to change how they think about land and natural resources, but most of them are invested in such a way (i.e. owning multiple houses on multiple parcels of land, often wit…
The ability to loan large amounts of money like this detaches people from the actual buying power of their money and the price of the property they're buying. Two grand in the bank is a nice amount of money. A two grand price increase on a property amortised over 20 years is considered to be nothing because the repayments are almost the same.
The solution to bring prices back down to ground level in my view is to end mortgages. Require the money up front and therefore force prices to drop until an equilibrium of affordability is reached. Needless to say this will never happen because the people who have the power to push for this are the ones benefiting from the status quo.
NB: I am not an economist.
Here's why investors buy up houses: they know your neighbors will do the dirty work of artificially constraining the housing supply, which makes it a good investment. Here's one who comes right out and explains this: > Meanwhile, local opposition to building is so commonplace and the approval process so cumbersome, time consuming, and expensive, even when a proposed project complies entirely with requirements, approv…
They know that the current government planning regulations mean that getting anything built is extremely difficult. They know that due to supply and demand that this makes property a wise investment. Blame planning regulations. I read recently that Japan and new Zealand scrapped various regulations and this led to stabilization / lower of property prices. Near me, someone is sticking up protest letters at bus stops c…
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It probably didn’t hurt that Japan has a declining population, so supply > demand
> so supply > demand Nope. Japan has a declining population, but the population keeps urbanising. So while there's hefty supply (literally millions of unoccupied housing inventory) in places nobody wants to live in, there is not in places where people are moving to (large cities). There's very regularly news and posts about unoccupied houses ("akiya") being literally given away by government and local authorities bec…
Japan's urban population is somewhere between stagnating and declining, not increasing. The contraction trend is even worse in most of their cities other than Tokyo.
Simultaneously the percentage of the population that is urban, is very slowly increasing.
Those are two very different things. Their cities are net contracting in population. They're now nationally losing people faster than they're urbanizing. They're currently losing around a quarter of a million people per year nationally. Their cities are not expanding faster than that drop. And given their already very high urbanization rate (and very slow rate of urbanization increase), it's unlikely anything will significantly change in that regard. This decade will see either a mostly flat population trend in Tokyo, or a modest contraction. What it won't show, is a meaningful expansion, as their national population contraction gets worse.
The pandemic put enough pressure on Tokyo that it actually contracted for the first time in ~25 years.
February 25, 2021
"Tokyo, Feb. 25 (Jiji Press)--Tokyo's estimated population fell by 662 from a year before to 13,952,915 as of Feb. 1, marking its first year-on-year decline in about 25 years, the metropolitan government said Thursday."
https://www.nippon.com/en/news/yjj2021022500969/
However, if you go back further, you can see the trend was already toward decline. This is from 2019:
June, 2019, The Guardian
"Has Tokyo reached ‘peak city’?"
"One could argue that the world’s biggest city has hit a sweet spot: a flatlining population, pervasive transit and little gentrification. But is ‘peak city’ even possible – and where does Tokyo go from here?"
"Unlike many megacities, the world’s largest metropolitan area has largely stopped growing, either in land or population."
https://www.theguardian.com/cities/2019/jun/14/has-tokyo-rea...
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What if I told you that in many areas households don’t even need a single car? If you require large amounts of parking everywhere and commensurately large roads, everything ends up so spread out that car based transportation seems like a necessity. It’s a self perpetuating cycle. If you don’t require so much land to be dedicated to cars you can build things denser and lower or even remove the need for personal cars.…
> What if I told you that in many areas households don’t even need a single car? Any part of the US where a street of townhomes would be more dense than the existing status quo is not one of these areas.
It’s not that uncommon in the US, especially in poorer areas
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It's less to do with appeal to people on the other side of economic divides, and more to do with the impossibility of selling "the great thing is that it incentivises your next door neighbour to build a high rise" and "sure, your parents will have to downsize because their pension won't cover the tax burden of the house they spent their lifetime saving for, but on the other hand it's great how many investors and comp…
> the great thing is that it incentivises your next door neighbour to build a high rise This is more about NIMBY attitudes and zoning laws, which are separate issues. > their pension won't cover the tax burden of the house they spent their lifetime saving for An LVT won't tax the house, only the value of the land. If the plot itself is hyper-valuable, that's not a bad place to be, financially speaking. Beyond that, "…
NIMBY issues and zoning laws are very much not separate issues when one of the chief selling points of LVT is building denser. It's a selling point the public aren't buying because they mostly don't want the value-maximising development next door, and being taxed as if they could develop it whilst still living in a zoned area so they can't is obviously worse. Sure, an LVT can be designed with deductions and exemptions for land use restrictions (and would have to be), but that's conceding away one of its key purported advantages.
> An LVT won't tax the house, only the value of the land. If the plot itself is hyper-valuable, that's not a bad place to be, financially speaking. Beyond that, "won't someone think of the poor landowners?" doesn't strike me as a very compelling argument in this day and age.
"Let's ignore the poor landowners" is a much worse place to be if you're trying to win over the large portion of the electorate which owns some land, which in most cases is probably the second most valuable thing they own after the house they live in (which is separate from the land for tax valuation purposes, but not in the reality that if they can't afford the land it sits on, they're under pressure to sell their home) and not closely coupled to their current income. The general principle of Georgist efficiency is that people on low incomes relative to the value of the land their house are forced to sell and this should drive down land prices for everyone, but the prospect of devaluation or forced sale of very expensive stuff they've already paid for is even less appealing to voters than being taxed on next year's unspent income. (Also, the entities which own the majority of the land turn out to be both less profitable and more relevant to the cost of basic goods like food than the businesses liberated from tax)
Regardless of whether you think these are not insurmountable problems for LVT or not, the thought of being caricatured as the guy who wants the tax system to force people to develop their homes into nice efficient apartment towers or sell in a great hurry to someone with deeper pockets is a much bigger concern for politicians than the thought people with different economic philosophies might actually agree with them for a change.