MIT graduate student says income inequality is actually about housing

Re:MIT graduate student says income inequality is actually a... by nugget on Thursday November 19, 2015 @08:28PM (#10599000)

Normally yes but not in areas where prices are already at the maximum ceiling of what people can afford. Raising property taxes shifts net income from the property owner to the taxing authorities. This reduces net income (yield or CAP rate) from the property and drops the price accordingly as investors sell investment properties and migrate their capital to other assets. Now, there's no free lunch. You end up hurting both wealthy investors and poor/middle class mortgaged-to-the-hilt homeowners who barely squeezed into the market. As we saw in 2008, bad things happen when a large % of mortgages plunge under water.

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Re:MIT graduate student says income inequality is actually a... by prostoalex on Friday November 20, 2015 @03:02AM (#10600182)

> You end up hurting both wealthy investors and poor/middle class mortgaged-to-the-hilt homeowners who barely squeezed into the market.

You don't necessarily hurt anyone, you just lower the attractiveness of real estate as an asset class. The yield chasers will move their money into a more attractive asset class, the value investors who buy real estate for price stability or tax reasons would stick around with lower yields.

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Re:MIT graduate student says income inequality is actually a... by crdoconnor on Friday November 20, 2015 @09:14AM (#10601212)

>You end up hurting both wealthy investors and poor/middle class mortgaged-to-the-hilt homeowners

Yet you'd be helping everybody else who didn't take on irresponsibly large debts.

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