"shifts the tax burden within the residential class from owners of moderately valued residential properties to the owners of vacation homes, higher valued homes and residential properties not occupied by the owner, including apartments and vacant lands."
https://www.mass.gov/doc/living-with-the-residential-exempti...
It hasn't seemed to help, but maybe it has a little.....
The best approach is to press for over-development of housing. It doesn't matter if someone owns 1 house, or 1000 houses, so long as there is more than enough homes for everyone.
Idea: have a property tax line item that's based on the ratio of population / housing units. The higher that ratio, the higher the tax. The tax revenue is used to cover the costs of constructing more housing units, which lowers the tax.
Want to really address the problem (and many other problem with today's economic system)? Prohibit interest bearing loans.
I do think credit scores are a scam (as are overdraft fees) and that rates should be reasonable, but no interest would make nobody lend money.
I like having a car loan - I was able to buy a car with current safety features. Without it I'd have to buy some unsafe (or unreliable) clunker in cash.
There's no reason why the car manufacturers won't be able to offer 0% interest on moderate term loans (a few years long). They already do today when they want to sell cars. This will drive prices down actually.
You can also have longer term leases without interest, effectively paying for depreciation and the company can profit from leasing the car.
Usually they have a maintenance staff that takes care of the property as well or add additional services.
Mom and pop landlords don't do any of that usually, and just hand someone a key w/ a call to the occasional contractor to fix something instead of an actual company. Most need a warm body to pay off their mortgage so they can sell it in the future and pocket the cash.
We need to fix the supply side, if the corp takes the properties that are broken down and fixes them that's a good thing. The problem comes when people who are around there now cannot afford the new rents they either become homeless or leave.
How far they have to leave depends on the supply of housing in the surrounding area, which b/c of the shortage is pretty low. With a huge supply of housing, it's possible to move next door or down the street and not much changes.
If we build more rents will go down, regardless of who the owners are. Prices to buy homes too for normal people.
Getting people to build more is the problem, high construction costs, zoning/permiting, local opposition etc.
Could it be the reason that those properties are too expensive for a regular Joe to fix up because of investors in the first place.
The latter are financial vampires, sucking money from lower classes, pushing housing prices higher, locking more people out of ownership.
If the family home you aspire to wasn't also climbing in price, you wouldn't need to sell your starter home at a profit.
This is the problem though. Capital gains for the seller represents inflation on an equivalent lifestyle for the next buyer.
First time buyer programs, lower mortgage rates, etc, are all just smokescreens to try and grow the pyramid one more level before it becomes evidently unsustainable. Exponential growth is too powerful: if housing is a good investment for long enough, it becomes unaffordable, period.
I think if it's an investment, that's fine. The problem is when housing is allowed to become a speculative investment, and the investment activity on housing begins to seriously threaten the actual housing activity. So for example you could do one or more of the following:
- Adjust mortgage rates on homes owned but not lived in (eg: triple them)
- Completely ban owning more than one home
- Implement a sliding tax on rental income (the more units you collect on, the higher the tax you pay)
- Bring back (or implement) rent controls and have them geared to cost of living
Basically anything that makes it less feasible to profit off of people who just want a safe place to live.
I don’t think the distinction you’re drawing makes sense; there are plenty of ways to speculate in an otherwise healthy housing market (e.g. move to a gentrifying neighborhood in the hopes of moving again in a few years when your property is worth more).
It seems like the common theme for the ills you identify is housing being un- or under-utilized while the owner is expecting or reaping the rewards of capital appreciation. More straightforward policy responses to that could include imposing a surtax on unoccupied property or taxing imputed rent regardless of occupancy.
I didn't leave it just as speculation being the problem. You ignored the second part where I said "and the investment activity on housing begins to seriously threaten the actual housing activity". The speculative investment features intensify the use of homes for purposes other than housing. In your example, the purchaser is using it for both speculation and housing. Not so bad. But someone who owns a home, then leverages the equity to buy another that they don't intend to live in but rent out, then does that again 2 or 3 times, now we have a problem where this person is just massively leveraging and speculating, supported by the government and the banks, "the system" if you will. And then higher rents are in the best interest of these more affluent people. Rather, "the system" could disincentivize this kind of activity.
> ills you identify is housing being un- or under-utilized...imposing a surtax on unoccupied property
Not really something I was talking about, no...but that problem would be addressed by the first two suggestions I offered. Of course if for some reason it was still a problem, or you didn't want to be as heavy handed, you could go ahead and impose a surtax like you said.
https://www.dailymail.co.uk/news/article-11119259/Hundreds-q...
" The unprecedented number of refugees arriving in Ireland has put pressure on the country's housing crisis, despite generous offers to host Ukrainian families. " I'm not sure how that results in cutting demand for building housing. The article is basically saying there's a crisis with few reasons offered.
How / why / what would be cutting demand for building housing? Demand is the last thing I'd be worried about. People need a place to live, and they need the housing to live in, so there's always going to be demand for building it.
Build social housing and maintain it at a level that far exceed market price.
Nothing should stop housing from being an investment in the same way that any good effected by supply and demand is, but there's a difference with the price of housing going up at at slightly over the rate of inflation and what we've seen the last couple years across the entire market. (Or even the decade before that in the bay area.) 10-20% a year rises in the COL is insane, and encourages rent seeking by current housing owners to the detriment of everyone else.
Public policy should favor the former, and punish the later.
Cities could roll out such a policy directly when making unused land available or other activities.
Hawaii has a good reason for doing this because land is scarce and there is no place to go. Basically anywhere else this would be idotic IMO.
Prices are constrained by people's incomes and over the 20th century incomes have grown faster than inflation (people have got richer). This leaves space for positive returns without necessarily hurting affordability.
Now, in many places construction has slowed a lot and capital is cheap, which is really what has caused prices to skyrocket.
Eventually, incomes will still constrain the market, though, especially in lettings.
This property is still an investment via improving the property to enhance income potential, but less of a speculative bet on the overall state of the market.
A high property tax based on land value would suggest that all the places people need to live would need to be generating income, have a high income for the family, or they'd need to move into a place where that land value is distributed across a wider base of households.
Of course land should be producing economic value. If it doesn't or thr value produced doesn't match the land's value, then something is wrong.
Lots of people buy a starter house with the intention of selling for more when they, for example, start having kids and need a bigger house.