There’s always talk about tax breaks for home owners…
Never talks of raising taxes on landlords and empty units tho.
That’s what would fix it. Tax them out of the housing market slowly and.prices will go down as they get out of the business.
Indeed. Nothing about this addresses rental markets and general extreme cost of living. Rather, it finds new ways to prop up severely overvalued housing markets.
Housing costs are so high because it’s become an investment over a necessary place for a human to live. A correction is severely needed and long overdue, but the government works hard to keep values artificially high from zoning laws at the bottom to preventing corrections at the top.
That and most people just do the standard deductions.
So tax breaks mostly help the wealthy in mansions.
It’s like how conservatives want to move income tax to sales tax. The wealthiest make a lot more than they spend. And when they spend it’s usually thru some shady shit where they don’t pay sales tax. Like claiming seven figure personal vehicles as a “company car” from a company they own.
It’s way of dressing up expenses to fit our criminally low corporate tax structure.
It’s a special kind of fucked up that the government is paid for by the poor to serve the interests of the wealthy.
Is not that the standard tho?
Like claiming seven figure personal vehicles as a “company car” from a company they own.
My parents did this kind of stuff. :/
Gas, restaurants, cars, insurance, etc. Probably so much stuff I don’t even know about. The company pays for it and they pocket the wages they pay themselves. All this while the people that work for them work part time with no benefits, and predictably have unstable financial situations.
But my parents view themselves as financially responsible and their workers as financially irresponsible. They worked hard to build their company but the rewards far exceed their work relative to their workers.
idk what I’m trying to say. I’m ashamed of the way my parents became successful but at the end of the day they played the game how it was meant to be played. Our society is fucked up on every level.
At the very least, they should raise real estate taxes on empty units. This will penalize people for owning several vacation homes, as well as incentivize landlords to lower rates in order to fill the unit.
Difficult to enforce, but send a few people to jail for real estate tax fraud and the rest will fall in line.
Wouldn’t a tax hike only get passed through to the renter?
Not really, because the rental market does not behave like commodities do. Generally, you have to live within a reasonable distance of employment. For this and other reasons, renters are much more vulnerable and tend to get exploited far beyond the cost of the service.
Basically, if tenants had any more money to exploit, they would already take it. Rents are maximally high wherever possible to extract maximum money from people who need a place to live.
Consider the common joke that I pay this much in rent every month but the bank says I can’t afford a house where the mortgage would be substantially less.
Agreed, and this would be solved by sufficiently high land value tax - if wasn’t profitable to be a landlord nobody would do it and the price of land would decline sharply. Henry George saw all of this coming a long time ago.
First time I’ve heard of the idea of a separate land value tax… Frankly it seems like an awesome idea, especially for cities.
I imagine it would make dense housing more profitable than McMansions, and punish the NIMBYs who keep standing in the way of affordable housing. Maybe we could make the tax increase significantly with the number of properties an individual owns and start it at the highest rate for things like shell corps and LLCs.
That’s why you set it exponentially based on units owned by parent company, maybe break it down as a tax paid by shareholders for huge corporations landlords.
They could try to pass it on to consumers, but smaller landlords wouldn’t have to pay it.
Making the biggest get out of the game first
They will just split the units owned on more companies then.
That’s why you set it exponentially based on units owned by parent company, maybe break it down as a tax paid by shareholders for huge corporations landlords.
That might not have been clear.
Set it at the parent company level so it’s not easy.
If they have X amount invested in rental real estate, that can just be taxed then
Believe me, the tax code for the wealthy is already complicated, they can handle this
Then there is no parent company…? Just another random company. It does not need to be complicated and this is far from it. It needs to be such that they can not easily avoid the taxes.
Never talks of raising taxes on landlords and empty units tho.
Canada passed this law in 2022 addressing that:
Need a Land value tax and the ability to build medium/high density housing.
There’s always talk about tax breaks for home owners…
Because governments want housing prices to stay sky high. The canadian prime minister openly said he doesn’t want housing prices to drop because too many people are using their houses as a retirement strategy. That’s why there are so many government programs that support buying a house but none that support renting.
Yeah, the first time I learned about our current vice president, she was trying to allegedly give renters similar tax breaks in California.
I don’t know what happened to that, but I was an immediate fan. Seeing as it never happened, smeh… Not sure what to think. But it’s a very popular idea amongst those of us who can’t afford to buy (most people in California.)
Or you know, just build more houses?
We’ve got 15 million vacant homes in the US.
The issue with this figure is that it comes from the Census Bureau, and their definition is broad and simple that it doesn’t into account for example. Here’s the definition they use:
Vacant Housing Units. A housing unit is vacant if no one is living in it at the time of the interview, unless its occupants are only temporarily absent. In addition, a vacant unit may be one which is entirely occupied by persons who have a usual residence elsewhere. New units not yet occupied are classified as vacant housing units if construction has reached a point where all exterior windows and doors are installed and final usable floors are in place. Vacant units are excluded if they are exposed to the elements, that is, if the roof, walls, windows, or doors no longer protect the interior from the elements, or if there is positive evidence (such as a sign on the house or block) that the unit is to be demolished or is condemned. Also excluded are quarters being used entirely for nonresidential purposes, such as a store or an office, or quarters used for the storage of business supplies or inventory, machinery, or agricultural products. Vacant sleeping rooms in lodging houses, transient accommodations, barracks, and other quarters not defined as housing units are not included in the statistics in this report. (See section on “Housing Unit.”)
https://www.census.gov/housing/hvs/definitions.pdf
As you can see this definition doesn’t really take into account a lot of genuine factors. For example, a lot of units are in really poor condition and require renovations in order to be livable again, but they’re counted as vacant because they still have their exteriors in place. Same goes units. They’re also counting units that are not entirely completed, units that are occupied but just temporarily like vacation homes, and mobile homes. We do have a lot of vacant units in this country, but it’s not as much as this figure would lead you to believe. In reality, we need new units, we need a lot of them, and we need them ASAP.
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Why is the for profit house building industry involved in solving the problem they had a hand in making?
Reform the CPA and just build ourselves. Or use the army core of engineers. They are getting paid either way.
Non-profit / below market housing is crucial. Without it, the people who actually keep cities functioning and interesting, service workers, artists, etc get pushed out.
I have a career that enables me to pay a lot of money for housing but I don’t want to live in a neighbourhood that only consists of people like me, cause I’m boring as fuck. I also don’t want to be part of the reason those people get displaced.
More social housing now!
Don’t be stupid. How else an I going to make money by doing nothing? Get a job? That’s for people who don’t pull themselves up by their bootstraps!
I pulled myself up by my parents bootstraps.
See, this guy’s knows how to make money, unlike the rest of you pleps…
Raise property taxes 500% for property that is not registered as the owners primary residence.
That should do it
The solution is to build more housing where people want to live.
Don’t get suckered into their blame game. This just results in everybody pointing fingers while the prices continue to soar.
Prices only go up because there’s competition to buy them.
Tax and other policies encourage the parasitic behavior.
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A few? How about just 1.
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Bob should be paying 200% property tax on the 2nd house
Bob is not the enemy, Bob is a lucky retiree.
Berkshire Hathaway and their 500k rental properties, are the enemy.
Both/neither of them are the enemy. The enemy is the system that allows anyone to profit off owning homes.
To be fair, everyone doesnt want to own housing all rhe time (say you study somewhere for a year for example, you might want to rent. Or when you try out anew city) so some landlording is needed. We don’t need landlords having lots of homes though.
Landlording should never be done for profit. Socialize the fuck out of it. My water, electricity and healthcare is socialized, why do parasites profit off my home?
Profit, profit, I’d say reasonable profit and mandatory standards.
For example, when I lived in sweden I knew a landlord, he was stopping because you beeded around 50 appartments (might be inflated from his side, but in many countries you can live off of 2 so …) to make a decent salary.
In sweden you cant rent out a shitty appartment, you cant set the rent as you like it, and youre taxed etc. etc.
I mean it should be like a normal job, not granting you robber rights.
The solution is making it illegal to own more than a few properties
This problem does not have a single solution. Get rid of landlords and you’re still left with a large group of people fighting over a limited supply. Better zoning laws, removal of parking minimums, better transit + micro-mobility infrastructure, and more below market not-for-profit housing.
It’s not a simple problem, even if the motives that created the problem are.
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that will make it easier for people to buy, and even harder to rent. Ie. that will worsen the problem.
EDIT: it’s apparent that Lemmy users don’t understand why someone would actively want to rent, and think everyone wants to buy. This makes the entire topic very difficult to discuss.
“More supply will increase demand”
Hmmm
not my quote.
More supply of houses for sale will make it easier to buy.
Buying is not renting.
Removing rentals from the supply makes renting harder and more expensive.
But right now the situation is people who want to own homes being forced to rent, not people who want to rent being forced to buy a home.
The point is that it doesn’t solve the problem. The problem is one, we don’t have enough housing supply, and two, the housing supply is largely controlled by parasites (big and small) who profit off their ownership.
Getting rid of landlords solves half the problem but you still have a large group of people who cannot afford to buy homes. You might think that’s good because housing prices will crash but who’s going to build homes when no one can afford to buy them?
I’m not saying I have all the answers but I know for sure that getting rid of landlords is not a silver bullet solution.
Well mortgages and rent costs are pretty close these days aren’t they? Its the down payment and closing costs that price people out of buying a home then? Why not take away the down payment requirements so that renters could participate in the buying market. Maybe there can be deals where someone sells you there home for 1-2 years for 50% market rate but they have to give the house back at the end of the term?
I think the point being made is that this landlord stuff almost rarely works out well these days so why not change?
no.
that is not THE situation. That is A situation.
it ignores foreign students wanting to rent while they study.
it ignores people renovating and needing a place to live for 3-5 months.
it ignores people needing a place to live after they move to a new city for work while they shop around to buy a place.
so much ignored.
Soooo many landlords just eager for those 3-5 month rental contracts.
/s
heh, yeah, which is yet another problem!
Pretty sure renting is what townhouses and apartments are for. Single family homes don’t need to be rentals at the rates they are now.
What do you think drives the price of rentals? Not being able to afford to buy keeps people stuck in rental living where they can be price gouged. If the price of houses drops due to an oversupply, more renters will buy, which reduces demand for rentals, which will drive down the price of rent making it more affordable to rent.
supply. and I look at growing population + foreign investment + rising post-covid building costs.
you’re talking about shifting rentals to buys, which is stupid, because it flat out ignores lack of supply. we need more housing.
Landlords hording property reduces the supply to people who want to buy. This shortage reduces the supply:demand ratio, which drives prices higher. Higher house prices informs the price of rent which is controlled by the people creating the shortage.
People aren’t suggesting to abolish investment property, they are simply saying we should remove the abuse investment.
but landlords “hording” property increases the supply to people who want to rent, which drives prices down.
The entry cost of the housing market is a greater driver of rent than vacant rental properties. The laws even encourage property owners to leave a property empty than lower the rent.
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Buying would be easier, renting not so much. They are different markets.
I swear, these people are functionally illiterate. Thanks.
TO RENT IT. jfc. I said rent. what the hell is wrong with you?
There’s very few cases where renting is the best option, and for that group they usually are well off enough to have options.
Society is concerned with folks who can’t afford to buy a home right now, even with the mortgage price being less than the cost to rent in some cases. That group has no other options, and because that group is expanding at the moment, its increasingly likely to be affected either personally or via those in your community.
false.
also, I said EASIER TO BUY.
EASIER TO BUY.
HARDER TO RENT.
Can you hear me now?
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false.
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I mean I agree with the notion that corporations shouldn’t be buying up entire neighborhoods, but at the same time if a corporation is building neighborhoods then I think it’s fine if they own them. We need more units ultimately
And that kids is how I ended up I owing my soul to the company store.
That’s stupid. If a company is buying up already existing units to manipulate prices then there’s clearly an issue with that, but if a company is buildings new units to sell or rent, then where’s the problem? They’re literally introducing new units to the market. God, people on Lemmy are so brain dead.
It’s one thing to build a house and sell it, it’s another to build it for the sole purpose of renting it at peak market rate.
Corporations use to build company towns and rented them at higher rates than they paid the workers.
People fought to stop this but there are always people who insist on relearning these lessons the hard way.
There’s nothing wrong with the concept of renting. It only becomes a problem when companies are manipulating the market or price gouging. If companies are renting out units are peak market rate, then the issue there’s way more demand than supply. The solution is fairly easy, build more units to flood the market and bring down the prices. It’s a tried and true method. Want to see in action? Look at how Texas managed to get all of its major cities to have a big decrease in their average rents compared to last year:
Austin managed to slash rent prices by 9.3%, San Antonio by 8.2%, Dallas by 3.7%, Houston by 3.2%. It’s not just Texas, Nashville managed to slash prices by 8.3%, Atlanta by 5.2%, Baltimore by 5.5%, and the list goes on and on. What’s the thing common with all these cities? They build more units. They flood the market with so many units that landlords have no choice but to bring rent prices down.
It’s not just rents, housing prices are also down in places that build more:
https://www.realtor.com/news/trends/home-prices-falling-cities-where-prices-dropped-most-past-year/
Home prices went down by 11.2% in Miami, Denver by 6.3%, Seattle by 5.5%, Kansas city by 4.9%, and the list goes on and on.
Want cheaper rents and houses? BUILD MORE HOUSES. Can’t do that? Update the outdated zoning laws to allow for multifamily buildings, mixed zoning properties, and higher density. This is the path forward.
These articles are speculative on the cause. I don’t see any data on the supply increases.
Some of these cities, didn’t increase supply. For example San Francisco saw similar decreases it they offer to exploration there.
The rents decreases are year over year but are flat over a two or three period of time, it’s just as likely the rent increases were a bubble that popped and not because of some unspecified change in supply.
I mean every city is different. In the case of San Francisco, it could be that city is shrinking and that is driving down prices. However, in the case of the Texan cities, which are all growing, the decrease in rents is indeed due to flooding the market with new housing units:
Though the price housing has gone up considerably which is slowing down construction, which might bring up the rents again. However, this still shows that building new housing units in mass does bring down prices.
Build. Social. Housing.
Its not a difficult concept. The “market” is not going to build anything that lowers the price. The market is not going to build anything fast enough. The market is absolutely not going to give a flying fuck about building to create communities.
Not in my back yard! Think of all the poor and homeless. Crime rate always goes up around them! This is a nice neighborhood!
Where I live the people in the towns with 5 million dollar home think those of us in the 1 million dollar homes are a criminal element that will invade their town.
LookingdownRiffraff.jpg
The meritocratic, capitalist way, would be to to put a property tax on it and to increase that tax, until
- rents increase so much that people can’t afford to live in cities anymore
- cities lose essential employees
- society shuts down
- THEN property loses value
- then it can be bought cheaply again
- and also rented for a low price, because the tax on the low value property is also low
Let’s go people!
The market will built it normally, the government doesn’t allow them to.
If you really want to incentive building then you need a land value tax.
That’s stupid, we already tried social housing and it didn’t work. The market is the one and only thing that can reverse the situation, and it has done so before too, we just need to put in place the right incentives
Other countries made it work… i wonder how lol
Which countries? Unaffordable housing is a problem worldwide
Vienna, among other places, has had a successful model for decades.
https://www.politico.eu/article/vienna-social-housing-architecture-austria-stigma/
Vienna is an interesting case because it’s one of the few democratic countries where the majority of the country isn’t too opposed to subsidizing the housing of a single city without enjoying any of the benefits. I guess when the model can work when there’s more people putting money into it than people who can actually enjoy it. Speaking of which, this system still has it’s issues though. Everybody wants to live in these units, but not everybody can get one. In order to get one you have to apply and most likely be put on a waitlist. Some of these wait lists are brutal because there’s only 5000-7000 units available. It’s gotten bad to the point where people are turning more and more towards private housing. Even with the limited number of units, the city is actually struggling to maintain the system because of inflation and other factors.
Singapore
Singapore is an authoritarian city state. Their model can’t be replicated in any country that’s not an authoritarian city.
Well there is your answer ;)
the regimes along with ruling elites collude for it not to happen but sure we can play “politics” circle jerk around it
What are you on? There is no grand conspiracy. A city is much easier to manage than a big ass country and an authoritarian government has the power to carry out it’s plans while giving zero fucks about the people. People don’t realize that Singapore is one of the most authoritarian developed countries out there. In Singapore, all land is held by the state, people cannot own any property, they can only lease it from the government kind of like China. Neighborhoods have very strict ethnic quotas. For example, if you’re ethnically Chinese and want to live in a neighborhood that is already 85% Chinese? Well tough luck because you’re legally not allowed to buy there until that percentage comes down. Because everything is publicly owned, the government is in charge of maintenance, and a good chunk of the buildings aren’t well maintained. You can’t complain about it because Singapore is authoritarian. You also can’t complain about the location or the design of the buildings because the governments gets decide all of that. What’s more is that a lot of these projects are built on top Singaporean cultural and historical sites, which a lot of Singaporeans argue is an erasure of their culture. Despite all of these problems, their system works because their government is authoritarian, the city is small enough to be effectively managed, they’ve lucked out with a series of competent leaders. If any of three things isn’t present, you’ll have a recipe for disaster. Want an example? Just take a look at the Soviet Union.
Decommodify housing along with every other human necessity, like water, food, utilities, and healthcare. There’s no way that any of these problems will be fixed permenantly otherwise.
But they are commodities…
They are necessities and should be detached from the market.
They’re both. You can’t detach them from the market because they are products of the market. In order for a house to be built you need landscapers to clear out the plot, a construction crew to build up the house and foundation, electricians to wire up the house, plumbers to hookup the pipes, roofers to put on the shingles, architects to design the whole thing, and you need to buy the material… which require loggers, welders, miners, factory workers, glaziers, and the list goes on and on. Even then, you still need appliances like stoves, refrigerators, microwaves, etc and each of those has it’s own supply chain and ecosystem. All of these people are trading their labor for money, they’re not going to work for free. Therefore, in order to have a house, you have to pay all these people in the chain to actually get the final product which you can either sell or enjoy. A house is commodity made of commodities. I’m not exactly sure what you’re expecting here, do you think the government is going to build houses with slave labor? Do you think we’re going to water the ground and get houses to grow? Do you expect us to follow in steps of a failed ideology like Marxism and have the government try to control the entire economy? No, these are all dumb. We can acknowledge that these are necessities and should be made accessible, safe, and affordable but also acknowledge that they’re products of the market and therefore we have to work with it, not against it.
What a load of shit.
This completely ignores how the housing market has become a farce, based more on speculation than reality. My prime minister has admitted that he does not want housing prices to go down because houses have become a retirement plan for an entire generation. The government literally admits that it wants housing to be unaffordable, how does that have anything to do with creating a functioning market? The price of home ownership is completely detached from the reality of building homes, arguing housing is expensive because it’s expensive to build is absolute horse shit.
Not to mention how many “commodities” have been socialized successfully. In order to get medical care you need to build a hospital, pay the doctors, buy the supplies, the list goes on and on. Yet my country has successfully socialized healthcare for the benefit of everyone who lives here. My utilities are socialized even though all the exact same concepts apply to them as well.
Your argument is completely hollow. Housing can and has been socialized, but doing so is against the interest of a wealthy land owners. Hmm I wonder if those wealthy land owners have any sway on government policy.
The price of home ownership is completely detached from the reality of building homes, arguing housing is expensive because it’s expensive to build is absolute horse shit.
I never said the housing market doesn’t have any problems, it clearly does. I’m merely pointing out the basic reality that houses and other necessities are products of the markets. You can’t “detach” them from the market, I doubt the guy who said this even knows what this means. Adding regulations, changing incentives, changing the method of payment is very different from “detaching”.
In order to get medical care you need to build a hospital, pay the doctors, buy the supplies, the list goes on and on. Yet my country has successfully socialized healthcare for the benefit of everyone who lives here. My utilities are socialized even though all the exact same concepts apply to them as well.
You do understand that socialized healthcare system still use the market, right? I don’t think you understand what socialized healthcare or anything really means. Your country still pays companies to build the hospitals, companies to maintain them, staff to run them, doctors to take care of the patients, companies to get medical equipment, companies to get medicine, and so on. These are all products of the market. The only thing that socialized healthcare does is transfer the costs from investors and consumers to the taxpayers… that is all. Healthcare services in a socialized system aren’t detached from the market, they just have a different scheme of paying for it all.
Your argument is completely hollow. Housing can and has been socialized, but doing so is against the interest of a wealthy land owners. Hmm I wonder if those wealthy land owners have any sway on government policy.
Your ignorance on how economies actually run doesn’t take away from the validity of my statements.
My piece of total shit landlord just took 4 months to fix my bathroom then raised rent an absurd amount. I’m enraged.
I mean he had to pay for the repairs somehow /s
This is something I’m currently struggling with. I rent a house and the roof is leaking in two different rooms. Problem is that last time I had the landlord do any repairs he increased my rent by $300 a month. I know that having a leaky roof is damaging his property, but it’s only a minor inconvenience for me at the moment.
I’m not about to spend an extra $6,000+ a year just to preserve his property when I can keep it from bothering me with a tack, some string, and a pitcher for the water to go into.
What are you going to do about it?
We don’t need tax credits.
We need Private equity out of the housing market.
We need better safeguards for tenants.
Financial moves like tax credits and incentives always end up benefitting the haves.
We actually need Mom and Pop landlords abolished. They own 80% of rentals.
Imo owning a second property to rent out for some side cash is fine. It’s a problem when your only occupation is “landlord”
https://sgp.fas.org/crs/misc/R47332.pdf
Wow. 70% as of 2022.
That’s idiotic. There’s nothing wrong with owning rentals or being a landlord. It only becomes an issue when massive corporations with endless amount of money buy so much inventory that they start affecting the market
It only becomes an issue when massive corporations with endless amount of money buy so much inventory that they start affecting the market
So you’re saying there’s something wrong with being a landlord?
How did you reach that conclusion? There’s a big difference between uncle Bob have a 3 unit building where he lives out in one and rents out the others and Blackrock buying 1,000 units in a town to artificially constraint inventory and inflate prices. There’s also a big difference between a company buildings a condo tower with 200 new units to rent/sell and a company buying already existing single family homes to manipulate the market. Clearly The latter examples in both of these comparisons are unethical and deserve to be outlawed, while the former example are fine.
How would people here feel about a tax that increases in rate per-property owned? People and organizations can still own as many properties as they want, but at some point they’re going to be taxed so much it’ll be impossible to profit off of them.
Until we actually remove republicans and republican lites from the legislature I highly doubt we’ll see any progressive tax reforms, like actually taxing the rich. You could probably find more support for expanding house buying programs. Stuff like lowering the down payment requirements, and or give a large grant for a portion of the house value if it is high and it could be clawed back at sale.
Personally, I’d prefer a monthly fine for unfilled housing, that is based on the rate you are charging for it. Landlord wants to jack your rent up 20%? If you leave, they pay a fine, based on that amount until they fill the unit. The fines go to subsidizing housing costs, so there is a self-balancing system. Right now, with property values increasing at insane rates, owners don’t really need to rent to break even, which leaves them free to price gouge their tenants. There is little pressure pushing rates back down, and there is all the freedom in the world to jack them up as high as you want.
The problem right now is one of supply and demand, not because corporations are buying up too many properties. It’s the other way around where corporations are buying up properties, because due to not increasing supply, and demand continue rising, it’s a good investment.
We need more high density housing all over the place. I live in a nice little town right outside a large US city. We have a train right into the city, and a nice little downtown area that could certainly use more business. They have been trying to put up apartment buildings, but the NIMBY-ism is through the roof. It’s like every little attempt to add more housing, people start whining to high heavens how it is killing our “small town” feel. I mean, I get it, I moved here for a reason, but something has got to give.
I can only imagine what’s happening in more rural areas where everyone wants their big lots and single homes.
So I don’t really oppose increasing taxes per home, but I don’t think it’s really going to solve the issue of increasing home prices as that’s not the root of the issue.
I’m not sure. Realizing I had no idea how much wealth the truly wealthy possess has been a reoccurring theme from the past few years. I think I’d rather see some hard limitations on who can own what.
It’s already like that where I live. It’s called the homestead exemption – property taxes are cut in half if it’s your primary residence
The homestead exemption is not a tax. It is a discount on tax. Therefore there is no penalty for owning extra homes. Landlords not only benefit from the homestead exemption but also get you to pay the property taxes on the house you’re renting.
Extra tax on non resident properties vs discounted tax on your residence. As far as I can tell, it’s the exact same thing
How would people here feel about a tax that increases in rate per-property owned?
That’s functionally how the homestead exemption works already
they’re going to be taxed so much it’ll be impossible to profit off of them.
I would simply start a PAC with all my extra money and bribe/coerce politicians into reducing the tax rates.
That’s functionally how the homestead exemption works already
Unless I’m mistaken, that’s just a small tax break you get on the taxes on your primary residence. After that, it makes no difference the number of properties you own, their taxes stay the same.
Could that be because those homeowners are charging rents high enough to cover both mortgage and insurance and more on the rented property?
Correct. In capitalism one must profit off the necessities of life.
Also, when you buy a house, the cost of the mortgage is locked in…assuming you don’t do an adjustable rate mortgage which were never designed for long term homeownership.
Yessum. I knew someone who put 20k down on a house after saving for awhile, this was back in late 2010s. Locked in $385/mo. Still had the yearly taxes, which weren’t the worst.
I am not sure why you think it should be any way else with our current systems, though. Asking less means the home owner is effectively paying for maintenance and upkeep entirely out of pocket, and entirely net loss for them. That said, I also don’t think that means they need to price gouge and trying to make huge profits.
It’s not a net loss. Renter’s pay can be used for maintenance or equity or anything else. Since houses don’t depreciate in this market and maintenance costs are not even close to rent, the landlord only gains.
I understand, but the comment I replied to was implying that rent should somehow be less than mortgage plus insurance. My point is that under those circumstances, it doesn’t make sense.
An equitable method would beto splitthe cost of mortgage and insurance between the property owner and the renter. 60/40, 50/50 etc. Having the renter foot the entire bill with no benefit other than occupancy is just not a fair deal imho.
You can only live in one location at any given time, so the fact someone is willing to pay money to use an otherwise unused, extraneous space/house is indeed a profit by any measure.
I’ve never understood the need for a downpayment to purchase. If you can make the monthly payments that’s all that should matter.
In theory I guess it protects against the costs of dealing with defaults or having people walk away from underwater mortgages. But on the other hand, all of that stuff could be insured against.
But on the other hand, all of that stuff could be insured against.
Thats exactly what PMI (Private mortgage insurance) covers. However if the insurance company doesn’t think you’re a good risk, then you might not be able to get that either. I have never looked at what criteria they use to grant or deny PMI. I’ve also never known anyone personally denied PMI.
It’s risk mitigation for the banks. You don’t have to put 20% down, but generally you’ll have to pay an additional insurance (PMI) if you don’t.
The downpayment requirements are much looser now then they used to be. Pretty much anyone in the US can get as low as 3 to 3.5% down, which means the down payment can easily be less than all the other home buying expenses (closing cost, inspection, title insurance, loan origination, moving, transfer taxes, …). You also typically have a month before you need to make your first principle repayment, which helps offset the down payment.
Veterans, active service members, and people buying in qualified rural areas can get 0 down mortgages.
Depending on where you live, there might be further assistance available. Around here, the county offers (means tested) down-payment assistance loans that cover 100% the minimum down payment, and has an interest rate that is at least 2% lower than that of the main loan. They also wave all transfer taxes for all first time buyers.
Its to keep us uppity poors on the down low
Exactly. The entry is a hurdle for many when that money could be used for repairs.
It is called credit risk lol
When they say “the housing crisis”, is that what the poors call the record profit boon?
That’s just the ruling class acting blind, disguising as a neutral news source
Of course they are, landlords are buying the house for what you would and doubling the mortgage payment as your rent. It should be illegal for people/corporations to rent out more than one single family home.
Residential units are generally considered 4 units or less. Over 80% of landlords are just normal people who spend their hard earned money on properties like this. Mom and pop landowners are incentivized to rent out their units as quickly as possible. Corporations, on the other hand? They can buy up entire neighborhoods and rent a single unit out for years just to manipulate market prices in their favor.
Why don’t they just buy homes? Are they stupid?
The sarcasm was lost on someone.
That or they just didn’t think it was an appropriate joke.
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It’s so bad, I would happily accept the mega cities from judge dredd being built.
They’d still sit empty.
Pretty much. Some weird perverse incentive would make it worth keeping them empty.
A partial solution is to remove nimby laws that prevent accessory dwelling units, duplexes, and medium and high density housing. Then you use the tax laws to heavily punish corporate ownership of low and medium density housing, and make it progressively more expensive for mom and pop landlords after a reasonable number of properties.
Hopefully this would lower the cost for single family housing, while increasing supply and variety of rentals. But somehow you’d have to prevent end stage capitalist collusion from fixing prices so competition could actually work to drive down prices.
Do you like HOA’s because this is how you get more HOA’s – if the laws won’t protect the desired community development, people will work together to create it and the result is something less efficient and less open.
This is why libertarianism is nonsense. People will quickly recreate all the old rules when they relearn the lessons that lead to the creation of those old rules.
How would the original comment encourage either more HOA’s or be considered libertarian? Weren’t they asking for more regulations and the addition of tax repercussions to disincentivize rental properties?
They want to remove nimby laws. I don’t know how to read that as more regulations.
Ban corporations/private companies from holding empty residential housing. Problem solved. Not complicated. Our system fucking sucks and is designed to protect land owners which is why we’re in this situation. This is fucking up our entire society, slowly bringing us down, we’re losing to China. This change needs to happen soon otherwise we’re going to see the working class get milked hard enough that our real economy will collapse.
Ban corporations/private companies from holding empty residential housing. Problem solved. Not complicated
Who passes this law? Who signs it? My municipal and state governments are infested with real estate agents landlords, attorneys, and bankers, all of whom profit from artificially scarce housing.
Who passes this law? Who signs it?
Exactly. Exactly.
Our system fucking sucks and is designed to protect land owners which is why we’re in this situation.
I really don’t see any change happening without… drastic inturruption.
Build more housing. That’s what you need to prioritize.
We have significantly more vacant units (around 15M) than homeless people (around 600k-1.5M by various estimates).
New dense energy efficient units connected to social services and green energy infrastructure would be great for everyone. But the idea that we just don’t have residential space to house people is totally wrong.
And where are they located, and why are they empty?
There’s your next big problem, a significant fraction of them aren’t where people want (or need) to be, or are vacation homes and don’t belong in these stats (unless you want to eminent domain them). Suburbs and ghost towns and remote regions pushes the average up.
https://todayshomeowner.com/general/guides/highest-home-vacancy-rates/
And where are they located, and why are they empty?
https://smartasset.com/data-studies/vacant-houses-2023
More than 300,000 housing units in New York City sat vacant. However, the Big Apple’s total vacancy rate of 8.3% in 2022 fell slightly from five years earlier (9.7%). Meanwhile, San Francisco had over 52,000 vacant units in 2022 for a 12.7% vacancy rate.
Turns out nobody wants to live in checks notes New York City or San Fransisco.
a significant fraction of them aren’t where people want (or need)
There are definitely large numbers of vacant units in areas that were de-industrialized or hit with natural disasters. However, speculators moving in and gobbling up the properties at their bargain basement rates, then squatting on them to drive up the overall value of real estate in the area, result in artificially high real estate rates across these neighborhoods. Even in places with ostensibly low demand for housing, the prices remain higher than in historical periods of high demand.
Suburbs and ghost towns and remote regions pushes the average up.
Over-development in less accessible places can make neighborhoods unattractive due to the commute. But the solution to this problem is often to improve mass transit in these neighborhoods and develop local public services (schools, post offices, grocery stores, etc) at their centers. Then do the one thing that Americans hate and fear more than anything - BRING IN THE MIGRANTS. Populate the neighborhoods with large socially cohesive cohorts of new people and energize the neighborhoods with public works spending.
This creates a virtuous cycle of economic growth and development that brings in still more people and creates new demand for more goods and services. This is exactly what big midwestern towns did to revitalize in the wake of deindustrialization. Chattanooga, Tennessee installed public Gigabit internet and became the center of a Tennessee tech boom. Detroit accumulated a network of art collectives in its low rent housing and reinvented itself as a cultural center. Atlanta, Georgia is enjoying an enormous economic expansion thanks to new federally subsidized battery plants in the city.
When public policy identifies a housing surplus, policymakers can create a virtuous cycle of development by building new business capacity in the immediate vicinity. Then you solve joblessness, homelessness, and a stagnant economy in one go.
https://comptroller.nyc.gov/reports/spotlight-new-york-citys-housing-supply-challenge/ 🤷
I don’t disagree with the rest, walkable cities are important, speculators shouldn’t be involved in housing, etc. But some places genuinely have a lack of available housing and the solution is to build away.
Some places have a lack of affordable housing. But anywhere you go, you can find living space at a high enough price point.
The only real exception is in the midst of a natural disaster or similar event, at which point the housing is typically exhausted because it is gobbled up by state bureaucracies for housing troops going in or refugees flooding out. And these sudden shortages are resolved by moving people to long term housing in surrounding areas, not by throwing up enormous tower blocks overnight.
That’s not even to say we don’t need new builds. A lot of the existing housing stock is old, poorly maintained, or inefficient. But the idea that we simply don’t have enough units to go around is real estate developer ad copy. It isn’t based in reality. And pursuing the policies advocated by the “not enough housing” folks inevitably leads to large new Luxury branded establishments that get sold off to speculators rather than lived in by the unhoused.
Sounds like eminent domain talk if you think there’s enough suitable available homes already
